Chinese banks

Profitability of Chinese banks set to fall

Once again, the country's lenders will post good 2011 results, however, 2012 earnings prospects are gloomy.
<div style="text-align: left;"> Bank of China's profit growth is already the weakest of its peers </div>
<div style="text-align: left;"> Bank of China's profit growth is already the weakest of its peers </div>
March 22, 2012

Chinese banks routinely publish good annual results these days. Their 2011 earnings, which will be announced from today onwards, are likely to set new records as well. But this good fortune will not continue. Rising bad loans and weaker demand are hurting the earnings outlook for banks in 2012.

Results for the Hong Kong-listed units of mainland banks are predicted to show that net profits grew 33% year-on-year, helped by a 49% jump in fee income and a 37% growth in net interest income, according to May Yan, a banking analyst at Barclays.

Reports from China’s banking regulator released during the National People’s Congress suggested that...

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