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Story summary
- China closed a record 670 banks in 2025, about one-quarter of its lenders.
- Nearly all closed banks were rural institutions with weak asset quality.
- Fitch reported rural banks had 0.45% return on assets and 2.8% non-performing loans.
- The closures aim to boost oversight, curb arbitrage, and improve transparency.
- Limited interbank links reduce contagion risk from these closures, Fitch said.
