Major Chinese State-owned Banks Show Pessimistic Projections

According to a report on March 29, several largest commercial banks in Communist China said that state-owned banks will face multiple high-risk adverse factors this year.

China Construction Bank (CCB), the second largest bank of the Communist Party of China, and Bank of China (BOC), the fourth largest bank, both said that the banking industry will face a more “complicated and severe business environment” this year. Unfavorable factors such as the global outbreak of the CCP virus, the abandonment of financial easing policies by major developed Western countries, and the intensification of geopolitical conflicts will seriously affect financial prospects.

At the same time, the President of the Bank of Communications also disclosed that it is difficult for the bank to achieve satisfactory profits this year, and people are pessimistic about future expectations.

Analysts believe that the current outbreak of the CCP virus and vaccine disaster are getting out of control. Partial or complete lock downs in major cities in China will worsen the CCP’s economy, especially in the service industries. The rising loan delinquency rate in the service industry will increase bank credit risks significantly. Greater financial risks come from the CCP’s crumbling real estate industry which takes 70% of the credit scale of the commercial banks. The failure of the real estate industry will lead to the complete collapse and bankruptcy of the state-owned banks of the Communist China.