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China's banks will feel full impact of crisis in 2009

By Wang Lan (chinadaily.com.cn)
Updated: 2008-12-26 19:52

The full impact of the global economic recession is expected to be felt by China's banking sector in the first half of 2009, Chinese bankers said today.

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Ma Weihua, president and CEO of China Merchants Bank, said at a financial conference held today in Beijing, that the global economic downturn would hurt earnings of China's commercial banks in the first half of 2009.

Ma attributed the eroded profit of Chinese banks to a combination of factors, including narrowing interest rate spread, increasing provisions for bad loans and dropping loan demands from enterprises, many of which have halted production because of reduced world demand.

Other bankers at today's conference echoed Ma's thoughts, saying China's commercial banks need to introduce new services to meet the demand of enterprises to cope with the financial crisis. The new services being mentioned at the conference included loans for mergers and acquisitions and financial advisory services for enterprises.