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3 Bank Picks & 1 Trend for China

China banks pose long-term allocation opportunities despite a lacklustre first quarter.

Kate Lin, CAIA 11.06.2021
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Counting RMB Banknotes

Chinese banks had an unimpressive first quarter. The rebound in net profit growth fell short of market expectations, and net interest margin declined due to pressure in interest rate repricing, a high base in the net interest margins, and low operating expenses in the first quarter of 2020.

But Morningstar analysts believe there will be a gradual improvement of bank profits through the rest of the year. Iris Tan, our senior equity analyst, says the first-quarter results may have marked the low point and the banks under her coverage will see growth of 7.1% in net profit in 2021.

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About Author

Kate Lin, CAIA

Kate Lin, CAIA  is a Data Journalist for Morningstar Asia, and is based in Hong Kong

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