Business
China’s State-Owned Banks: Navigating Narrow Margins Amidst Economic Support Measures
China's government-run banks are experiencing reduced profits as they heed Beijing's directive to bolster the economy. As the nation grapples with unparalleled obstacles, these public sector banking behemoths demonstrate their crucial role as economic mainstays.
The bank's net interest margin (NIM), which is a critical measure of a bank's earnings, fell to 1.43 per cent from 1.72 per cent the previous year. Concurrently, its ratio of non-performing loans (NPL) – a measure of a bank's asset quality and credit risks – slightly decreased to 1.35 per cent from 1.36 per cent.
Li Ying, who leads financial institution ratings at S&P Global (China) Ratings, has stated that if loan prime rates (LPRs) take another dip in the latter half of the year, it will put more strain on the bank's net interest margin (NIM).
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