“The global epidemic will continue to reappear, the expansionary monetary policies of developed economies will be withdrawn, geopolitical conflicts will intensify,” the Bank of China (BoC), the country’s fourth largest bank by assets, also said on Tuesday.
For his part, the president of Bank of Communications Co Ltd (BoCom) assured on Friday that it will be difficult for the bank to obtain satisfactory profits this year.
China has been battling a resurgence of COVID infections in some of its biggest cities, prompting partial and full lockdowns that analysts say will weigh on the economy.
The main impact on banks will be “rising delinquencies in service sectors,” said Nicholas Zhu, an analyst at Moody’s. “These industries include wholesale and retail, leisure travel and other consumer discretionary services.”
Banks’ warnings about the difficult outlook came alongside full-year net profit figures from all three lenders, which beat estimates.
For the BoC, full-year profit rose 12.3% to 216.6 billion yuan, above the 199.1 billion yuan estimate in a Refinitiv survey of 17 analysts. The same was true on the CCB, where net profit for the full year rose 11.6% to 302.5 billion yuan, versus Refinitiv’s estimate of 293.1 billion yuan among 21 analysts.
