China's commercial banks will face bigger credit risks this year as they confront a range of economic uncertainties, from tightening at home to the global impact of US subprime woes, a banking regulator said on Monday.
"The economic and financial conditions at home and abroad will be more complicated in 2008, and China is facing sterner challenges in sustainable economic and financial development," Jiang Dingzhi, vice chairman of the China Banking Regulatory Commission (CBRC), said in a statement.
The comments echoed the sentiments of Merchants Bank President Ma Weihua, who told Reuters in an interview on Monday that Chinese bank earnings will probably be hit this year because of the US subprime crisis and Beijing's economic cooling measures.
The South China Morning Post on Monday also quoted mainland banking sources as saying that Bank of China is expected to make a big write-down of its investments in US subprime-related securities in the fourth quarter of last year, dragging down its profit.
Jiang listed the crisis sparked by defaults of subprime mortgages in the United States as just one of the challenges for Chinese lenders. They would also have to contend with domestic economic overheating, inflation, volatile share and property prices and government efforts to protect the environment, he said.
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