Record Profits Bolster Banks as Storm Looms 创纪录利润有助银行抵御楼市低迷隐忧

By newsdoug on August 29, 2011

China banks bolster balance sheets with record profits There’s not a lot to say about any one of China’s major state-owned banks for the latest earnings period, except that collectively they all posted record profits as they continue to reap strong revenue from record lending in 2009 and strong margins as China raises interest rates. (English article) ICBC (HKEx: 1398; Shanghai: 601398), the nation’s largest bank and last to report, said its profit jumped 30 percent in the second quarter to $17 billion, in a typical scenario for most banks. If the banks are smart, I hope they’re using all those profits to bolster their capital, which seems to be constantly falling short of Beijing’s ever-rising reserve requirement ratios. Of course all these hikes are designed to brace the banks for an expected shock they will suffer if and when the real estate market corrects, which will severely affect not only their real estate loans, but the debt-repayment ability of local governments that rely heavily on land sales to pay off their loans. We already saw the first signs that a second round of massive capital raising may be coming last month, when China Merchants Bank (HKEx: 3968; Shanghai: 600036) announced plans to raise $5.4 billion through rights offerings. (previous post) China has been so worried about the looming downturn, and forcing its banks to prepare so much, that I’m starting to wonder if perhaps all the panic isn’t a bit overblown. Investors seem to think perhaps Beijing is being a bit too conservative, with ICBC and Agricultural Bank of China (HKEx: 1288; Shanghai: 601288) shares both outperforming the Hang Seng Index this year, though China Construction Bank (HKEx: 939; Shanghai: 601939), which has more exposure to real estate, is faring less well. On the whole, I would say to look for the bank stocks to outperform the market in the months ahead, as investors start to believe that perhaps these troubled lenders have built up a big enough cushion to withstand the coming real estate downturn.

Bottom line: After record profits and massive fund raising two years ago, China’s banks may finally be adequately capitalized to withstand the coming downturn in China’s real estate market.

关于中国各大国有银行最新财报，并没有过多可谈论之处。除了一点：在2009年贷款额创新高及中国加息所带来的利润推动下，各家银行均发布了创纪录的收益。工商银行(1398.HK; 601398.SS)称，该行第二季度利润增加30%，至170亿美元，多数银行都取得了类似增长。如果各大银行聪明的话，我希望他们会利用所有利润充实资金，由于中国政府不断提高存款准备金率门槛，各家银行资金一再告急。当然，如果房地产市场降温，银行料将受到冲击，不仅是房贷严重减少，地方政府还贷能力也将降低，因为其主要依赖卖地还债。上月初步迹象显示，中国银行业或将掀起新一轮大规模融资，中国招商银行(3968.HK; 600036.SS)宣布，将在香港和上海发行权利股，筹集54亿美元。中国政府担忧经济低迷隐现，敦促各大银行提高存准率，我不禁猜想，这一切是否有些过度惊慌。投资者似乎认为，中国似乎有点过于保守，尽管中国建设银行(0939.HK; 601939.SS)受房地产影响较大，股价表现平平，但今年工行和农业银行(1288.HK; 601288.SS)股价均跑赢?生指数。整体而言，由于投资者开始相信，各大银行已搭建起足够大的“软垫”，预防楼市或将出现的低迷情况，我预计，未来几个月银行股将跑赢大盘。

一句话：鉴于中国银行业利润创新高，并在两年前大规模融资，中国银行业或终能保持资本充足，抵御中国楼市或现低迷的隐忧。