23 Oct 2013
Fears of default in top Chinese banks depresses risk
FXstreet.com (Barcelona) - There seems to be renewed concerns over possible Chinese bank defaults, after top banks in the country tripled the amount of bad loans written off in H2, in what is perceived as heightened risk of defaults.
As Bloomberg reports: "Industrial & Commercial Bank of China Ltd., the world’s most profitable lender, and its four largest rivals expunged in the first six months 22.1 billion yuan ($3.65 billion) of debt that couldn’t be collected, up from 7.65 billion yuan a year earlier, filings showed. That didn’t pare first-half profits, which climbed to a record $76 billion, as provisions were set aside in earlier periods when the loans began souring."
Bloomberg adds, citing Ma Kunpeng, a Beijing-based analyst at Credit Suisse Founder Securities Ltd.: “The banks and the regulators’ interests are aligned in speeding up write-offs. This prepares them for a rainy day.”
As Bloomberg reports: "Industrial & Commercial Bank of China Ltd., the world’s most profitable lender, and its four largest rivals expunged in the first six months 22.1 billion yuan ($3.65 billion) of debt that couldn’t be collected, up from 7.65 billion yuan a year earlier, filings showed. That didn’t pare first-half profits, which climbed to a record $76 billion, as provisions were set aside in earlier periods when the loans began souring."
Bloomberg adds, citing Ma Kunpeng, a Beijing-based analyst at Credit Suisse Founder Securities Ltd.: “The banks and the regulators’ interests are aligned in speeding up write-offs. This prepares them for a rainy day.”