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S&P: Pandemic Impacts on Asset Quality Need 2 Yrs to Digest, Expected to Hamper CN Banks' Profitability

AAStocks ·  Jul 28, 2021 03:24

S&P Global Ratings expressed that the profitability of Chinese banks has been undermined over two major reasons, one being the credit costs. S&P believes the negative impacts on asset quality induced by the pandemic may take two years to be digested, hence weighing on the profitability of the banks.

On the other hand, the generally stable monetary policies in China along with the unchanged LPR interest rate also contributed to the decrease of the average revenue from loan business, added S&P.

As for Hong Kong banks, S&P forecast Hong Kong’s GDP growth in this year to be 6.5% with that of next year being 2.5%, contending that the economic recovery was mainly due to the local stimulus measures as well as the economic and trading growth in China.

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