Profits of China's banks expected to grow by 10%
The growth rate is smaller than those of previous years should be achieved by cutting the provision coverage ratio. The banks' non-performing loan balances and ratios will both trend upwards, posing risks for their future performance, the China Securities Journal quoted Lian Ping, chief economist at the Bank of Communications.
Liu Yuhui, an economist at the Chinese Academy of Social Sciences, was cited as saying that the banks are not likely to fully expose risks and unveil all of their non-performing loans, provided that the heads of the banks remain in charge.
Data from the China Banking Regulatory Commission showed that China's total bank assets reached $22.65 trillion (140 trillion yuan) as of the end of May, up 16.3 percent year on year. The non-performing loan ratio for commercial banks stood at 1.03 percent, topping 1 percent for the first time since last year. Provision coverage reached as high as 280 percent, according to the report.
Eleven of China's 16 listed banks have already cut their provision coverage ratios, according to the banks' first-quarter reports. ■