Chinese banks are likely to see further erosion in their capital cushions above regulatory minimum requirements after the quarter ended Sept. 30, as market sentiment remains weak and the country’s property market has yet to fully recover.
Chinese banks were some of the least cushioned in the Asia-Pacific region in terms of capital buffers, as measured by common equity tier 1 (CET1) ratio in excess of minimum regulatory requirements, according to an analysis of data by S&P Global Market Intelligence. The analysis covered banks headquartered in the Asia-Pacific region with total assets greater than $300 billion as of Sept. 30. In total, CET1 ratios of 12 of the 20 Chinese banks in the analysis fell year over year. Despite the declines, CET1 ratios of all the Chinese banks remained above the minimum regulatory requirement, the data show.
Read More : Chinese Banks Brace for Potential Erosion of Capital Buffers Due to Lingering Weak Market Sentiment