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Fitch: Policy Support for CN Banks Rises, but NIM Pressure May Continue
Recommend 51 Positive 90 Negative 32 |
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Chinese policymakers have stepped up support for unsecured retail lending and some borrowers' refinancing needs, Rating agency Fitch said. As part of a broader consumption package, the authorities plan to use fiscal funds to subsidize interest by up to 1 ppt on new qualified consumption loans. However, Fitch Ratings believed it remains uncertain as to whether this will effectively revive loan demand or ease pressure on banks' net interest margin (NIM). Sector-wide NIM dropped by 12 bps YoY to 1.4% in 2Q25. Growth in unsecured retail lending (mainly credit cards and consumption loans) has slowed, rising by 6% in 2024, compared to a CAGR of 18% from 2014-2024. The deceleration reflects ongoing property-sector stress and weaker income prospects amid slower growth. Asset-quality indicators have softened, with the sector-wide credit cards past-due ratio for six months or more rising to 1.4% by end -2024 from 1.1% at end-2023. AASTOCKS Financial News Website: www.aastocks.com |
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