Big banks racked up US$6.4b in Atm and Overdraft fees
Source: Daily Crux
http://thecrux.com/big-banks-rack-up-6- ... raft-fees/
Chinese banks are going to earn their way out of trouble. “We believe the recovery in corporate earnings and banks’ better loan mixes should feed into improving asset quality. These factors, combined with rate hikes and solid loan demand, will generate a 20bps (for the Big 4) expansion in NIMs and 35% NPAT growth over the next three years”
Chinese banks are trading at only 2.9 times pre-provision operating profit, a common metric used for banks, near the bottom of the global peers. Even Japanese banks trade at above 6 times.
But Goldman thinks Chinese banks’ asset quality is improving. Non-performing loan ratios seem to be stabilizing – in the fourth quarter, NPL ratios fell 2 basis points.
Chinese companies hoard a lot of cash. “We estimate that Rmb24tn of their Rmb58tn cash/financial assets is excess cash — which can therefore be used to reduce debt and support their ability to cover loans”
Companies excluding banks in Singapore must repay S$38 billion ($27 billion) of local bonds through the end of 2020,
Six firms have defaulted on S$1.2 billion worth of notes since November 2015.
The 10-year yield has been in free fall ever since the Federal Reserve took a less hawkish stance than many had predicted heading into the meeting.
The broader sector is coping with weak lending and a drop in revenue last year.
The stocks of larger companies have enjoyed huge increases, so they are more vulnerable,
Should President Donald Trump and the new Congress fail to repeal the Dodd-Frank Wall Street Reform and Consumer Protection Act, bank stocks could face additional headwinds
There's little sign of deleveraging. Those banks increased total loans by 10.2 percent in 2016, to $12 trillion.
That means lending is still growing much faster than gross domestic product.
More worrying, shadow-banking assets -- such as wealth-management products -- increased by 15 percent, significantly faster than loan growth.
Non-performing loan ratios fell slightly at two of the big four banks and showed slower growth at the other two.
But even that meager progress resulted partly because banks -- with the government's encouragement -- set up special-purpose vehicles dedicated to raising capital, including by issuing securitized bonds to buy up bad loans from their parent corporations.
Making matters worse, the banks are setting aside less capital to cover bad loans.
Capital reserves to cover NPLs grew at only 5.4 percent for the big four, and most of that was driven by Bank of China Ltd., the best-run and most prudent of the bunch.
Excluding Bank of China, reserves grew by only 2.6 percent, well slower than growth in traditional loans and 82 percent slower than growth in the most risky type of loans in wealth-management products.
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