News@ChinabyNumbers

Analysts expect China's banks' profitability to suffer from a government cuts to interest rates introduced earlier this week and down payment requirements for mortgages, as they face a narrowing interest spread. "The impact of an interest income cut is more direct and swift to banks," said Li Shanshan, a China Merchants Securities analyst. Securities research house China International Capital Corp expects banks to post an average of a 3%-15% drop in profitability next year. China's banks posted strong first-half profits this year, with Industrial and Commercial Bank of China reporting more than 50% year-on-year growth and the largest profit of any bank globally during the period. However, analysts previously said those earnings growth rates "will not be sustainable into next year."

Source: Shanghai Daily

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Tags: banks, China International Capital Corp, china merchants, China Merchants Securities, Commercial Bank of China, earnings growth, ICBC, Industrial and Commercial Bank of China, interest income, interest rates, li shanshan, mortgage down payments, mortgages, profitability, profits, securities analyst, securities research, Shanghai, Shanghai Daily