Smaller lenders that are less diversified in geographic reach and types of borrowers are likely more vulnerable to liquidity risk amid the ongoing debt problems with many property developers and weakening global trade, analysts said.
The inclusion of trading volume has lowered the overall systemic scores of most Asian G-SIBs, which have much smaller global trading and asset management operations than their U.S. and European counterparts.
The divergence in loan growth between midtier and large state-owned commercial banks in China reflects Beijing’s attempt to revive the world’s second-largest economy through funding infrastructure projects.
More real estate developers and small businesses will unlikely be able to service their loans despite Beijing’s more relaxed stance on the pandemic, and bank profitability will remain under pressure, analysts said.