China: Fears of possible credit risk and inflation temper booming growth
Despite having 98 banks with $10,756 billion in assets and $112.2 billion in net profits ranked in the 2011-2012 AB500, fears of a Chinese subprime lending crisis and inflation may cool down Chinese banks’ growth engines. October 05, 2011 | ResearchChina boasts some of the biggest banks in the world, and these banks are in pole position to capitalise on China’s growing stature on the world stage. This is amply reflected in the top 50 of the Asian Banker 500, where Chinese banks have moved up several notches, sending stagnant Japanese and Korean lenders scurrying down the standings. Nevertheless, concerns over substantial exposure to risky municipal debt and inflationary pressures could force the central bank, the People’s Bank of China (PBOC), to rethink some of their pro-growth policies regarding the financial sector. Table 1. Largest Chinese banks by asset Please click to view enlarged image Consistent with the trend observed throughout the past decade, China’s Big Four state-owned banks, namely Industrial and Commercial Bank of China (ICBC), China Construction Bank (CCB), Agricultural Bank of China (ABC), and Bank of China (BOC), have been instrumental in providing the credit that allowed China’s economy to grow 9.5% in the second quarter of 2011 while the world continued to slump. Loans grew 19.5% across 2010, highlighting the role of banks in China’s development story. On this front, infrastructure projects have been the main beneficiary of bank lending. Fixed-asset investment currently makes up 70% of China’s GDP, and unlike more abstract sectors, infrastructure investments positively contribute to the expansion of manufacturing industries while providing tangible benefits such as housing. At the same time, Chinese banks are also turning their attention to... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Asia Pacific, Asian Banker 500, China, Credit Risk, Databookasia pac,Asian Banker 500,China,Credit Risk,Databook, Asia Pacific,Asian Banker 500,China,Credit Risk,Databook, Keywords:PBOC, ICBC, CCB, ABC, BOC, CBRC, Inflation, GDP, NPL PBOC, ICBC, CCB, ABC, BOC, CBRC, Inflation, GDP, NPL
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