2016 Global Banking Crisis: Ratings agency Fitch says Major Chinese Banks In Deep Trouble, Moody’s Put Deutsche Bank On Review For Downgrades, and Canadian Bank Depositors Are Now At Risk Of Bail-InsSlower profits seen for China banks
RATING agency Fitch said yesterday that major Chinese banks are likely to show subdued earnings growth for 2015 amid margin compression and asset depreciation.
Net profit of China’s banking sector grew only 2.4 percent in 2015, a drop from the 9.6 percent year-on-year growth recorded in 2014, data from the China Banking Regulatory Commission showed.
Fitch said the financial statements of major banks — to be released next week — will confirm the slower profit growth. It is likely to decline further this year unless the authorities relax the minimum non-performing loans’ provisional requirement of 150 percent, which is weighing on the liquidity of the banks.
http://www.shanghaidaily.com/business/finance/Slower-profits-seen-for-China-banks/shdaily.shtmlMoody’s Put Deutsche Bank On Review For Downgrades
But it’s different this time…
May/June 2008 – S&P downgrades major US banks including Merrill, Lehman, and Morgan Stanley (all after the banks raised additional equity capital, sparking the bounce).
It’s not over yet.
http://www.zerohedge.com/news/2016-03-21/its-not-over-yet-moodys-put-deutsche-bank-review-downgradesIt’s Official: Canadian Bank Depositors Are Now At Risk Of Bail-Ins
The specific text:
Introducing a Bank Recapitalization “Bail-in” Regime
To protect Canadian taxpayers in the unlikely event of a large bank failure, the Government is proposing to implement a bail-in regime that would reinforce that bank shareholders and creditors are responsible for the bank’s risks—not taxpayers. This would allow authorities to convert eligible long-term debt of a failing systemically important bank into common shares to recapitalize the bank and allow it to remain open and operating. Such a measure is in line with international efforts to address the potential risks to the financial system and broader economy of institutions perceived as “too-big-to-fail”.
The Government is proposing to introduce framework legislation for the regime along with accompanying enhancements to Canada’s bank resolution toolkit. Regulations and guidelines setting out further features of the regime will follow. This will provide stakeholders with an additional opportunity to comment on elements of the proposed regime.
Bail-in Regime for Banks
Canada’s financial system performed well during the 2008 global financial crisis. Since that time, Canada has been an active participant in the G20’s financial sector reform agenda aimed at addressing the factors that contributed to the crisis. This includes international efforts to address the potential risks to the financial system and broader economy of institutions perceived as “too-big-to-fail”. Implementation of a bail-in regime for Canada’s domestic systemically important banks would strengthen our bank resolution toolkit so that it remains consistent with best practices of peer jurisdictions and international standards endorsed by the G20.
http://www.zerohedge.com/news/2016-03-22/its-official-canadian-bank-depositors-are-now-risk-bail-insDecade of Growth Poised to End for China Banks Stung by Bad Debt
… curb overcapacity in manufacturing, bad debt in China’s banking industry jumped 51 percent last year to 1.27 trillion yuan, data from the bank regulator show.
http://www.bloomberg.com/news/articles/2016-03-23/decade-of-growth-poised-to-end-for-china-banks-stung-by-bad-debtANZ warns of bigger credit hit from resources exposure
SYDNEY, March 24 Australia and New Zealand Banking Group on Thursday said bad debt charges for the first half of 2016 could almost double due to a downturn in the resources sector, a problem analysts warn could snowball across the banking sector. A …
http://www.reuters.com/article/anz-bank-charge-idUSL3N16V4WP
