Quote | Super Quote
Super Quote   |   Detail Quote   |   Interactive Chart   |   Transaction   |   Related News   |   Related Securities   |   Company Information   |   Dividend Records   |   Short Sell
00939 CCB
RTNominal up6.250 +0.090 (+1.461%)
Research Report

14/12/2020 17:31

China's top regional banks outperform smaller peers

[ET Net News Agency, 14 December 2020] Moody's Investors Service said in a new report
that the performance of China's 25 largest regional banks is supported by the country's
rebounding economy and their loan exposure to leading businesses in their operating
regions, reducing the systemic risk associated with regional banks' higher overall problem
assets and weaker capitalization as a group compared with other groups of banks.
"China's top regional banks will benefit from operating in regions that are key GDP
contributors to the economy, and a lending focus on stronger regional enterprises and
retail borrowers," said Yulia Wan, a Moody's Vice President and Analyst.
"Smaller regional banks are at greater risk of financial stress, given their exposure to
riskier regions and loans, but their issues should also be easier to resolve by
authorities thus containing contagion risk," added Wan.
Moody's expects the top regional banks will continue to outperform their smaller peers
in asset quality, profitability and capitalization, even as some metrics weaken to reflect
higher loan risks and structural adjustments in the Chinese economy despite the GDP
rebound.
NPL formation will remain high and credit costs elevated, although for the top regional
banks countered by higher provision coverage, stronger capital ratios and better
profitability.
The top regional banks will also outperform their smaller peers in profitability, thanks
to their faster migration to retail loans with more stable interest rates when compared to
corporate loans. Still, their growing exposure to the segment presents some risk in the
form of an increasing proportion of unseasoned and uncollateralized consumer loans.
Capitalization meanwhile will benefit from slowing risk-weighted asset growth as the top
regional banks increase their lending to segments with low-risk weights, such as
mortgages. Capital issuance will also be supported by efforts from Chinese authorities to
reduce system risk, along with more stringent capital requirements.
Still, the top regional banks will remain weaker than the large national banks in
profitability, capitalization and liquidity. (KL)

Remark: Real time quote last updated: 07/05/2021 17:59
  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 2021 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.