'China strut banks'

'China strut banks'

World August 22, 2016 12:45

amsterdam - The Chinese government has quietly begun large-scale support from its weak banks. This enables the Swiss investment bank UBS.

The Chinese would deliberately with the smaller, unlisted banks have started to avoid turmoil in the market.

For years are concerns about Chinese banks and their lending. Especially the large amount of weak loans, which for years is not relieved of infrastructure but which are included in the capital of the banks, make analysts skeptical about the health of the financial sector.
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The capital ratios of the banking sector have fallen in the second quarter, according to data from the Asian broker Daiwa which analyzed the quarterly figures. The Chinese government would allocate $ 100 billion.

,, We expect that support will continue intensified in 2017, especially among listed banks, 'said UBS analyst Bedford.

UBS certainly think that $ 172 billion will be needed to get the buffers at the desired level. Sanford C. Bernstein thinks $ 72 billion will be enough next year for the smaller banks.

'Declining profitability '

This week large Chinese banks such as Agricultural Bank of China and Bank of Communications with numbers. According broker Daiwa will prove to have decreased their profitability over the previous quarter.

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