Non-performing loans in Wenzhou — a good barometer of Macau VIP
- As announced today, non-performing loans surged in the city of Wenzhou, Zhejiang province in June 2012 to 2.69% of overall loans, up from 1.33% at the beginning of 2012. Wenzhou was named a pilot zone in March to test a series of financial reforms aimed at ending reliance on shadow banking.
- Wenzhou generates only 4% of visitors to Macau but its non-performing loan ratio has been a great indicator of Macau’s VIP growth particularly since June 2011, as shown in the chart below
- Macau’s VIP business is heavily reliant on credit and liquidity
