NPAs may hit China bank results

SHANGHAI: China's biggest banks, set to post record profits for a fifth year, may report 2011 results marred by an increase in bad loans as an economic slowdown and faltering property market trigger defaults by borrowers.

Industrial & Commercial Bank of China and its four biggest local rivals may post a 15% increase in combined Q4 net income when they report this month. Their NPAs rose for the first time since Q3 of 2008.

China's efforts to bolster banks' risk buffers and curb inflation following a two-year, $2.7-trillion credit boom have pushed up funding costs, slowed the economy and triggered defaults.