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Judgment on Banking Performance in the Second Half of the Year and Policy Options (No 162, 2015)


--Analysis Based on Interim Reports 2015 of 21 Listed Banks

By Zhuhongming & Lei Wei, Research Team on "Analysis of Listed Banks", Research Institute of Finance, DRC

Research Report No 162, 2015 (Total 4847)


In the first half of 2015, although credit risks of listed banks were continuously revealed, net profits growth rapidly slowed down, and capital adequacy ratio also faced downward pressure, yet it still showed strong capabilities to resist risks, expand credit and gain profits. In the second half of the year, listed banks will face continuously rebounded bad loan ratios, possibly reaching 1.7% by the end of the year; net profit growth rate will continue to fall, with the annual growth rate probably going negative; and capital adequacy ratio indexes will rise. In response, we should have an objective and overall understanding and take proactive measures First, we should view the fall of banks' profit growth dialectically and see that profitability after the slowdown remains potent and conducive to rebalance between finance and the real economy. Second, we should proactively cope with rebound of bad loan ratios through methods such as optimizing financial ecology and guiding banks to put aside more provisions. Finally, we should make good preparations against future fall in capital adequacy ratios by lowering the dividend rate, and intensifying external capital supplement.