S&P projects increase in bad loans
12 September 2008
The credit rating agency Standard & Poor's (S&P) has said that Chinese banks would likely see a "slight" increase in non-performing loans next year as property developers and export-geared manufacturers' performance suffers due to the global economic slowdown, the South China Morning Post reported. S&P analyst Liao Qiang expected the increase to have little negative impact next year, though he said effects beyond 2009 were "difficult to predict." Many mainland lenders recorded strong earnings growth in the first half of this year, including Industrial and Commercial Bank of China, whose 57% increase in first-half earnings made it the world's most profitable bank. However, analysts are expecting mainland banks' incomes to moderate, and Bank of Communications Chairman Jiang Chaoliang has said that the strong first-half growth "marked the peak of a fast-growing cycle."