China Banks Report $312 Million of Bad Loans in Mortgage Boycott

China’s banks have detailed 2.11 billion yuan ($312 million) of loans at risk to the increasing number of homebuyers refusing to pay mortgages on unfinished homes, as fears grow over a potential spillover into the wider financial sector.

State-owned Agricultural Bank of China Ltd. said Thursday it held 660 million yuan of overdue loans on unfinished homes, the largest among banks that have disclosed their holdings. Industrial & Commercial Bank of China Ltd., the world’s biggest bank by assets, said it held 637 million yuan of such mortgages, while smaller rival Industrial Bank Co. said 384 million yuan of mortgages on unfinished homes have become delinquent. In most cases, the overdue amount makes up less than 1% of the lender’s total mortgage portfolio.