Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

Connect with us

Hi, what are you looking for?

slide 3 of 2
THE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & LifestyleTHE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & Lifestyle

Business

Business

China’s major banks face property decline and expense increases.

Photo Credit: Reuters Photo Credit: Reuters
Photo Credit: Reuters Photo Credit: Reuters

Listen to the article now

Analysts said a prolonged property sector slowdown, greater expenses, and a worsening global macro outlook could weaken China’s top banks’ revenue and margins, clouding growth expectations for the world’s second-largest economy.

Five of the nation’s top state-owned banks presented annual results last week, revealing some of their issues.

If property asset quality deteriorates or the economic recovery stalls, banks’ capital buffers might be affected. They may also lose stock price increases.

Nevertheless, the two largest banks, Industrial and Commercial Bank of China (601398. SS) and China Construction Bank Corp (601939. SS), reported revenue declines and slower profit growth without provisions and impairment losses. Three reported a 2% or fewer sales increase.

After three years of tight COVID-19 rules that hampered commerce and domestic demand, China’s economy began to revive. However, analysts warned that the recovery is still fragile.

China’s banking sector’s first-quarter revenue is expected to slow. As a result, analysts and bank executives predict net interest margins (NIMs), a key indicator of bank profitability, to decrease slower in 2023, with the sharpest drop in the first quarter.

Citigroup analysts, including Judy Zhang, noted that Chinese banks face unfavorable pricing dynamics due to regulators’ window direction to frontload lending, which increased credit availability.

Analysts observed that banks’ new-loan yield was hampered by weak credit demand and excessive pricing rivalry.

China’s first two months saw higher bank lending than planned. Nevertheless, loans to the policy-driven infrastructure sector, with some prominent banks giving rates below 2% to state-owned enterprises, drove the performance, according to several bankers who declined to be identified.

They claimed lower lending rates than deposit rates pressure lenders’ NIMs.

“Smaller banks will suffer more,” said ING Greater China head economist Iris Pang. “Competition caused this.”


Comment Template

You May Also Like

Business

**Excerpt:** In a world of simmering global trade tensions, China is bracing for potential economic shocks as the U.S. prepares to announce new tariffs...

Business

**Excerpt:** Bong Joon-ho’s visionary approach to filmmaking shines once again as stars Toni Collette and Naomi Ackie reveal insights into his creative process for...

Business

**Excerpt:** Bong Joon-ho’s *Mickey 17* is a sci-fi masterpiece that cements his status as one of the most visionary filmmakers of our time. Starring...

Business

**Excerpt:** Bong Joon-ho, the visionary director behind *Parasite*, returns with *Mickey 17*, a sci-fi thriller based on Edward Ashton’s novel *Mickey7*. Starring Robert Pattinson,...

Notice: The Biznob uses cookies to provide necessary website functionality, improve your experience and analyze our traffic. By using our website, you agree to our Privacy Policy and our Cookie Policy.

Ok