Chinese Banks to See 7% Profit Drop in 2020, NPL Ratio Set to Rise to 2%: Bank of China Report

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A report from one of China’s big state-owned banks foresees a sizeable drop in the profits of the Chinese banking sector as a result of the impacts of the COVID-19 pandemic.

The “2021 Economic and Financial Outlook Report” (2021年度经济金融展望报告) released by the Bank of China ( BOC) on 30 November forecasts that the full-year net profits of China’s commercial banks will see a YoY decline of around 7% in 2020, while the non-performing loan (NPL) ratio will hover at around 2%.

The Report expects profits to bounce back to between 2 – 3% in 2021, however, as the Chinese economy stages a robust recovery from the Novel Coronavirus.

BOC analysts forecast full year Chinese GDP growth of around 2.1% in 2020, followed by growth of around 7.5% in 2021.

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