Chinese banks

Chinese bank profit growth may fall to single digits in 2013

Profits will be squeezed by lower interest margins and fee income, analysts say.
<div style="text-align: left;">
Minsheng Bank is expected to be the most resilient among the Chinese lenders in terms of earnings growth (Imaginechina) </div>
<div style="text-align: left;"> Minsheng Bank is expected to be the most resilient among the Chinese lenders in terms of earnings growth (Imaginechina) </div>

The profitable Chinese banks are not immune to the country’s slowing economic growth and their profit growth will drop below 10% in 2013, analysts estimate.

Weighing on their earnings will be a further weakening in credit demand from struggling Chinese companies and the government’s push on interest-rate liberalisation, which will lead to a narrowing of interest margins. At the same time, the efforts by China’s banking regulator to clamp down on excessive commission charges will reduce fee income.

“The year of 2013 is going to be very challenging for all Chinese banks as the margin will continue to fall,” said Wilson Li, a banking analyst at Guotai...

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