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News content

High property prices increase the risk of bank shares

2018-04-09-(Mon)
【28Hse.com】  

Thanks to the United States entering the interest rate hike cycle, the bank’s net interest margin is expected to widen, and bank stocks that have been sluggish in the past have once again reheated, but some analysts have warned that the market should not be overly optimistic and ignore the risk that bank stocks may suffer in the future. Risks, including debt problems in emerging countries, slowing economic development in the Mainland, high proportion of household debt in some regions, and increasingly stringent government supervision, have the opportunity to affect the performance of banks and increase the risk of bad debts.

Locally, the quarterly report published by the Bank for International Settlements indicates that the Mainland and Hong Kong are among the regions that are most at risk of banking system risks. Among them, debt and contributions accounted for a warning rate, especially in Hong Kong, where land prices are at a record high. Debt of developers accounted for as high as 30% of GDP, ranking top among 26 places in the world. The bank is concerned that if property prices fall in the future and market interest rates rise, banks granting developers a chance to borrow or be affected will have the opportunity to trigger risks in the banking system.

China Bank intends to lower its provision coverage risk of bad loans rebound

On the mainland bank stocks, it was pointed out that China Banking Regulatory Commission intends to lower the regulatory requirements for the provision coverage of the Bank. Lyon issued a report that the adjustments are mainly targeted at banks that actively deal with non-performing loans and strong capital positioning, so not all banks can He was relaxed to the minimum requirement, but he still believes that the bank stocks are better than the insurers. However, the Bank of America Merrill Lynch is not optimistic about the relevant measures, that the relevant measures may mean that the Bank's non-performing loan rate is about to rebound.

Cooperating with Yingxin regulations or affecting HSBC’s earnings performance

For foreign investors, see individual development. In response to Brexit and implementation of segregated banks, many securities companies expect that non-recurring costs will increase in the future, which will have an impact on earnings performance. It is also suggested that HSBC’s new team will continue to “slim down”. Plan or cut 25% of regional operations. Deutsche Bank publishes report that the exchangeAlthough the control of dividend returns is stable, there may be potential repurchases, but the current valuation is not cheap and already reflects the growth prospects. UBS also believes that the valuation of Standard Chartered is not attractive and faces the risk of weaker income growth.

Translated by 28Hse.com . All right reserved.