China Bank Survey Predicts Slower Growth

More than 56% of bankers in poll say liberalization policies are adversely affecting their bottom lines

Chinese banks expect to see much slower business growth from 2012 to 2014, and about 70 percent of bankers predict they will see a less than 20 percent increase in their profitability over the three-year period, according to a survey jointly conducted by PricewaterhouseCoopers and the China Banking Association.

The latest survey on Chinese bankers released in Hong Kong on Monday also said bankers’ sobering estimate on growth came after the country’s landmark decision to liberalize interest rates, which has allowed lenders to widen the interest rate bandwidth for loans and deposits since mid-2012.

More than 56 percent of respondents indicated that the removal of the deposit interest rates’ ceiling has a negative effect on banks’ profit margins, while more than 60 percent of bankers in the survey said interest rate liberalization poses challenges to their business in the coming three to five years.

via Xinhua

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza