- Chinese banks are facing increasing pressure on fundamentals after weak earnings growth in the first quarter of this year, dragged down by plunging credit demand amid renewed COVID-19 waves, ongoing property sector struggles, and global macroeconomic uncertainties.
- While the central government has pledged additional targeted steps to stimulate the economy, uncertainty remains as China pursues its dynamic zero-COVID strategy.
- In terms of asset quality, non-performing loans (NPL) are unlikely to rise substantially in the next few quarters, partly owing to forbearance granted to some lockdown-affected borrowers as well as property developers.
For further details see:
Chinese Financials Feeling The Squeeze Amid Sluggish Credit Demand