Quote | Super Quote
Super Quote   |   Detail Quote   |   Interactive Chart   |   Transaction   |   Related News   |   Related Securities   |   Company Information   |   Dividend Records   |   Short Sell
03988 BANK OF CHINA
RTNominal down3.230 -0.020 (-0.615%)
Research Report

16/03/2021 15:48

Chinese banks' performance steady as economy recovers

[ET Net News Agency, 16 March 2021] Moody's Investors Service said in a new report that
Chinese banks' profitability and capitalization will stabilize, and asset growth will slow
down amid elevated asset risks over the next 12-18 months as China's economic recovery
continues. China's regulators are continuing to derisk the financial system with a special
focus on financial technology platforms.
"Chinese banks' asset growth is likely to decelerate in the next 12-18 months as the
economy becomes less reliant on extraordinary liquidity creation through the banking
system. Banks' loan balance grew 13.3% from a year ago at the end of 2020, 41 basis points
lower than three months ago. Non-loan asset growth also slowed to 8.3% from 9.3%," said
Nicholas Zhu, a Moody's Vice President and Senior Credit Officer.
Meanwhile, asset risks will stay high despite banks' steady asset-quality metrics.
Economic uncertainties will remain even after the pandemic because of difficult structural
adjustments pushing up nonperforming loan (NPL) formation. This is notwithstanding the
lower system's NPL ratio of 1.84% at the end of 2020, from 1.96% three months earlier, due
to large disposal of bad debts in the fourth quarter.
At the same time, profitability is likely to stabilize in the next 12-18 months to
reflect stable, albeit high, credit costs from elevated asset risks and the need to
replenish loan loss reserves after the substantial bad debt disposal last year.
Capitalization, too, will stabilize, supported by slower risk-weighted asset growth as
banks' asset growth shifts to retail loans with lower risk weights. System liquidity will
remain stable amid policy normalization. The PBOC has refrained from further easing
monetary policies as the economic recovery gathered pace while ensuring sufficient system
liquidity. (KL)

Remark: Real time quote last updated: 28/03/2024 18:00
  Real-time basic market prices of Hong Kong securities are provided by HKEx; a Designated Website authorized by the HKEx Group to provide the Service
A Member of HKET Holdings
Customer Service Hotline:(852) 2880 7004     Customer Service Email:cs@etnet.com.hk
Copyright 2024 ET Net Limited. http://www.etnet.com.hk ET Net Limited, HKEx Information Services Limited, its Holding Companies and/or any Subsidiaries of such holding companies, and Third Party Information Providers endeavour to ensure the availability, completeness, timeliness, accuracy and reliability of the information provided but do not guarantee its availability, completeness, timeliness, accuracy or reliability and accept no liability (whether in tort or contract or otherwise) any loss or damage arising directly or indirectly from any inaccuracies, interruption, incompleteness, delay, omissions, or any decision made or action taken by you or any third party in reliance upon the information provided. The quotes, charts, commentaries and buy/sell ratings on this website should be used as references only with your own discretion. ET Net Limited is not soliciting any subscriber or site visitor to execute any trade. Any trades executed following the commentaries and buy/sell ratings on this website are taken at your own risk for your own account.