China pushes banks to sacrifice profits: report

The move shows concerns about its ability to recover after the pandemic.

The Chinese government is asking its banking industry to give up $211b (CNY$1.5t) in profits this year through lower lending rates, slashing fees, deferring loan payments, and approving unsecured loans to small businesses, reports Bloomberg.

Regulators are also requesting banks to keep profit growth below 10% this year.

The move highlights concerns about how quickly China can bounce back from the crisis, as the orders on limiting profit may hinder investor interest in the sector.

Banks’ gross revenue and earnings growth may drop to zero for the rest of the year from 5% in Q1, Citigroup said, whilst analysts believe listed banks may be better off than some of their regional peers which are likely to see earnings growth in the red.

Here’s more from Bloomberg.