Margin, provision risk to weigh on top Chinese banks’ earnings in Q4

Earnings at major Chinese banks are set to grow more slowly in the fourth quarter as a cooling economy is weighing on lending margins and asset quality. Our Investment Research expert Avishek Suman elaborates on the steady growth in the big four's overall net interest income, driven by solid loan demand and relatively good asset quality.

Extract from the article: "The four major banks are proactively adjusting their revenue structure, focusing on the fee-based business, such as wealth management and credit card services… However, given the sheer size of these banks and their reliance on the traditional interest-based business, which has also grown, the fee-based business is not expected to be the major driver of their top line in the short term”