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Banks face sluggish growth for rest of 2012
By Feng Jianmin |
00:00 UTC+8 September 21, 2012
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Print Edition
Print Edition
THE 10 largest listed banks on Chinese mainland may continue to suffer from slower growth for the rest of this year amid an economic slowdown and asset quality challenges, an industry report said yesterday.
China's declining product managers index in August indicated that domestic demand is still weak amid a pessimistic economic outlook in Europe, the US and Japan, PricewaterhouseCoopers said in a report.
Chinese policy makers may still cut interest rates to boost the economy but this will result in a narrower interest rate spread for banks.
The report also pointed out that the average overdue rate among the 10 banks, including the Industrial and Commercial Bank of China, China Construction Bank, the Bank of China and the Agricultural Bank of China, climbed in the first half of the year to 1.28 percent from 1.06 percent as of the end of 2011. Part of the overdue loans will "certainly" become bad loans in the future, adding to asset risks for banks, it said.
In the first half of this year, the combined profits of the top 10 listed banks rose by 16.5 percent annually, slower than the 34 percent annual growth seen in the first six months of 2011.
"The banks" growth rate won't reach the level of previous years," said Jimmy Leung, PwC China banking & capital markets leader. "Still banks will grow by at least 10 percent this year."
China's declining product managers index in August indicated that domestic demand is still weak amid a pessimistic economic outlook in Europe, the US and Japan, PricewaterhouseCoopers said in a report.
Chinese policy makers may still cut interest rates to boost the economy but this will result in a narrower interest rate spread for banks.
The report also pointed out that the average overdue rate among the 10 banks, including the Industrial and Commercial Bank of China, China Construction Bank, the Bank of China and the Agricultural Bank of China, climbed in the first half of the year to 1.28 percent from 1.06 percent as of the end of 2011. Part of the overdue loans will "certainly" become bad loans in the future, adding to asset risks for banks, it said.
In the first half of this year, the combined profits of the top 10 listed banks rose by 16.5 percent annually, slower than the 34 percent annual growth seen in the first six months of 2011.
"The banks" growth rate won't reach the level of previous years," said Jimmy Leung, PwC China banking & capital markets leader. "Still banks will grow by at least 10 percent this year."
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