Profits of foreign banks in China dropped in 2012
April 30, 2013 Category Finance, Weekly
According to the annual report released by the China Banking Regulatory Commission (CBRC), foreign banks achieved profits after taxes of CNY16.3 billion in 2012, down from CNY16.7 billion in 2011. Their asset quality also fell as the ratio of soured loans against total loans rose to 0.52% at the end of last year, from the 0.41% one year earlier, said the report. The total assets of the banks went up 11% year-on-year to CNY2.38 trillion, but their proportion to the total banking assets in China dropped to 1.82%, from 1.93% at the end of 2011. The asset proportion of foreign banks in China has been falling since 2006, when they accounted for 2.11% of total banking assets. “Chinese banks, especially the biggest five state-owned lenders, have dominated the market, and their growth has affected foreign banks’ market shares,” said Jimmy Leung of PricewaterhouseCoopers (PwC) China. The capital adequacy ratio among foreign banks in China rose to 19.74% by the end of 2012, from 18.83% the previous year. Their core capital adequacy ratio (CAR) stood at 19.25%, in contrast with 18.38% at the end of 2011. By the end of last year, banks from 49 countries and regions had set up 42 locally incorporated banks, 95 branches, and 197 representative offices in China. Outstanding loans extended by those banks increased 6.2% to CNY1.04 trillion from one year earlier, while their deposits rose 7.7% to CNY1.43 trillion.
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