November 10, 2013

Foreign banks reap record profits in China

As China continues to liberalize restrictions on its financial system, foreign banks have expanded their assets 24 percent year-on-year to 2.15 trillion yuan and their combined net profits more than doubled to 16.73 billion yuan (2.65 billion US dollars).
Beijing: Global banks have posted record profits from their Chinese operations, with many foreign lenders expecting annual growth of about 20 percent up till 2015. The combined net profits of 181 foreign banks more than doubled to 16.73 billion yuan (2.65 billion US dollars) in 2011 from 7.78 billion yuan in 2010, boosted by multinationals' investment growth in China, according to a survey, which polled chief executives, senior managers and branch presidents of 41 foreign banks. Assets of those foreign banks in China expanded 24 percent year-on-year to 2.15 trillion yuan, PricewaterhouseCoopers (PwC) said in the survey report. "The fundamental challenge for the foreign banks over the next three years will be balancing the investment and needs of a dynamic and fast-developing Chinese market against the constraints of a slowing economy back home," PwC Financial Services Advisory Partner William Yung said in the report. Since the first quarter of 2011, China's economy has slowed for six consecutive quarters, with its gross domestic product expanding only 7.6 percent in the second quarter of last year, the slowest growth pace in three years. Foreign banks are more dedicated to their Chinese investments now than since 2008, as China continues to liberalize its currency and restrictions on its financial system, the survey found.

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