Provides a range of banking and related financial services, including commercial banking, investment banking, insurance, direct investment and investment management, fund management and aircraft leasing business.
Chinese banks accounted for almost a third of global bank profit last year, up from just 4% in 2007. Much of the gains came at the expense of European peers who bled marketshare. Leading the profit tables: ICBC with pretax earnings of $43.2B, China Construction Bank with $34.8B, and Bank of China with $26.8B. JPMorgan (JPM) and HSBC (HBC) took fourth and fifth place.
Bank of China (BACHF.PK) is among Asian lenders filling the gap left by retreating European banks, sharply increasing property loans in the U.S., especially in NYC. "China ... has capital that needs to be put to work," says an analyst, exactly the opposite of the issue facing many EU banks.
Credit Suisse downgrades China's banks, swinging from overweight to underweight without stopping at neutral. Importantly, the bank tags what could be the next sovereign risk issue, as massive local off-balance sheet financing begins to move onto Beijing's books. CHIX -4.3% YTD.
With credit expansion expected to continue to surge, China's banks will need to raise $131B of fresh capital over the next 5 years, according to a regulatory source. Bloomberg calculates this amounts to about 13% of the total stock market capitalization of China's banking system. CHIX +2.4%.
A legacy of torrid credit growth and surging property prices puts China at a 60% risk of a bank crisis by 2013, says Fitch. According to Richard Fox, a bursting real estate bubble will put "holes in bank balance sheets." The Hang Seng Finance Index brushes off concern, +1.5% last night.
Falling short of forecasts for the 2nd consecutive month, Chinese banks make just $91B in new loans in February. It either suggests that numerous steps to slow credit growth are taking effect, or that banks have become more adept at obfuscating the true amount of lending. CHIX -0.9% YTD.
China's currency reserves increase by a record $199B last quarter as surging hot money inflows more than make up for a shrinking trade surplus. Rate increases are drawing in speculative capital, creating more liquidity, necessitating higher rates, drawing in speculative capital ...
Agricultural Bank of China and China Minsheng Bank file to raise $11B in stock and debt. It was only last year AgBank raised $22B in an IPO. With new capital standards on the way and concerns about bad loans mounting, expect more banks to come to market.