Posts Tagged Chinese Banks

Industrial & Commercial Bank of China (1398) Ltd., the world’s largest lender by market value, posted a 33 percent gain in fourth-quarter profit as wider loan margins allowed Chinese banks to overcome a slowdown in credit growth.

Net income climbed to 37.9 billion yuan ($5.8 billion) in the quarter ended Dec. 31, based on figures released by the Beijing-based bank today. That exceeded the 36.6 billion yuan average estimate of 19 analysts surveyed by Bloomberg.

Perhaps some of our investors have noticed that Chinese banks have been conspicuously absent from their portfolios. The reason is because before we begin building long term positions, we want to complete a thorough analysis of the Chinese financials  sector. For example, PetroChina is a no=brainer for China exposure to the energy sector. Chinalco or the Aluminum Corp of China is a also a no=brainer in the materials sector. However, banking is a whole different beast in China, more complex.  The capital calls on them right now is another wild card.  The political element is confusing as a well thought article in the Economist fingered which was titled, “Chinas Financial System, Red Mist.  Who Matters in the worlds second largest financial system is barely understood.”  The maze of Chinese banks requires an assessment of the virtues of the giants and the opportunities in smaller institutions. Having said that, it is imperative to take solid exposure to the Chinese Financial secotr and we are looking closely at China Construction Bank, ICBC and China Merchant Bank.  This is a great example of a sector that I would like to get a good “entry point”.  China Construction Banks share price is 39 bucks.  The 52 week low is 29 while the 52 week high was 48 last November.   More soon.

China Construction Bank Corporation provides a complete range of banking services and other financial services to individual and corporate customers. The bank’s services include retail banking, international settlement, project finance, and credit card services.

http://www.ccb.com/en/home/index.html

www.crinvestmentadvisors.com

China is raising capital requirements to reign in their banks lending and the fear is that this move could hurt the global recovery. Well, we just dealt with a global crisis because, in large part, bank lent more than was practical. This simply clarifies that China´s economic managers are relatively competent and that China will defend their interests before that of the “global” economy. Even if the economic recovery is more of a U than a V or more organic versus explosive, this is a wise move by China´s bank regulators.

www.crinvestmentadvisors.com

Wealth Management

http://www.bloomberg.com/apps/news?pid=20601087&sid=aPaqwgKpm3os&pos=1

This time it´s the banks. They are raising capital as the regulators increased capital requirements. China’s banks are preparing to raise tens of billions of dollars in additional capital to meet regulatory requirements following an unprecedented expansion of new loans this year, according to people familiar with the matter.

China’s 11 largest listed banks will have to raise at least Rmb300bn ($43bn) to meet more stringent capital adequacy requirements and maintain loan growth and business expansion.

http://www.ft.com/cms/s/0/6f635a3a-d8f8-11de-99ce-00144feabdc0.html

www.crinvestmentadvisors.com

Private Banking