Investors are having nothing of China Construction Bank's "beat" of earnings expectations, instead more concerned with where non-performing loans are headed. The ratio fell to 1% in Q2 from 1.4% in March, but the bank says its "unrealistic" to expect further declines. You think? Of 47 business owners disappearing this year, 17 were CCB customers.
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.
China delays tightening bank capital rules until next year, with new draft rules from the China Banking Regulatory Commission that seek to set "reasonable" schedules for banks to meet capital targets in a way that helps "maintain appropriate credit growth." Shares of Chinese banks climbed.
A ranking of the 10 largest banks by market cap as it's evolved over the last 20 years. Completely vanished are the Japanese lenders that dominated in 1991. Today's list is all about China and the American TBTFs.
BofA (BAC) may further reduce its stake in China Construction Bank (CICHY.PK), a report says, having sold around half its 10% holding in August for $8.3B. The remaining stake is worth about $9.2B based on CCB's market value.
China yesterday appointed the chairmen of China Construction Bank (CICHY.PK) and the Agricultural Bank of China (ACGBF.PK) to run the securities agency and insurance commission respectively. The outgoing securities chief, who was at AgBank previously, is off to run the banking regulator. Anybody say "revolving door?"
Maybe a signal China is not ready to ease up on property restrictions despite signs of a slowdown, China Construction Bank (CICHY.PK) has reportedly raised mortgage rates in Beijing. Another report suggests the move from CCB is far from an isolated one, and made necessary as tight money forces lenders to ration credit.
Bank of America (BAC +3.2%) confirms that it will sell 13.1B shares of China Construction Bank (CICHY.PK). The sale is expected to generate ~$8.3B in cash proceeds and an after-tax gain of ~$3.3B; it should generate ~$3.5B in additional Tier 1 common capital under Basel I. BofA retains a 5% stake in CCB.
Bank of America (BAC +3.4%) pops as CNBC reports the lender will sell at least half of its stake in China Construction Bank (CICHY.PK). BofA's entire ownership in CCB - now trading near a multi-year low - is valued at about $20B.
Temasek Holdings - Singapore's SWF - unloads 49% of its Bank of China (BACHY.PK) and 8% of its China Construction Bank (CICHY.PK) holdings, apparently getting as jittery as others over the scale of bad debt on (and often hidden off of) the banks' books. Already down sharply in past weeks, both lenders fell nearly another 4% in Hong Kong last night.
The PBOC's plan to set reserves on a bank by bank basis and adjust those levels each month has the central bank "playing the role of god," says an economist with Credit Suisse. With so many discretionary judgments, policy mistakes are likely.
In another move to slow down credit growth, regulators order Shanghai banks to stop all loans for fixed asset investments for the remainder of the year. Shanghai is particularly bubbly, with 36.1B yuan of loans closed last month towering over 4.8B made one year prior.