Retail banking in China - Coronavirus (COVID-19) Sector Impact

Summary

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel coronavirus a pandemic on March 11, 2020.

Fears surrounding the impact of COVID-19 have already significantly impacted the global economy, with key markets across the globe losing 20-50% of their value for the year to date. Many economists and institutions have cut their forecasts, with consensus global GDP growth currently at 2.6% for 2020 and many experts predicting the potential onset of recessionary environments.

A similar trend is expected in China, as economic growth in the country dipped in the first quarter of 2020. The decline had an adverse impact on all sectors, including the banking industry. While China was the first country to be impacted by the COVID-19 crisis, it is now on a path to recovery, with businesses starting their operations and domestic travel resuming.

This report focuses on the impact of the coronavirus outbreak on the economy and the retail banking industry in the China. Based on our proprietary datasets, the snap shot provides a detailed comparison between pre-COVID-19 forecasts and revised forecasts of total mortgage, consumer, credit card loan balances as well as deposit balances in terms of value and growth rates. It also offers information on measures taken by the government to combat coronavirus.

Scope

• Weighing heavily on the Chinese forecast for 2020, more so than other markets, is the ever-present threat of a second wave of infection disrupting the economy. Meanwhile, the manufacturing sector, an important source of wealth for the Chinese economy, will show signs of improvement due to the easing lockdown restrictions. Consequently, with Chinese manufacturing gradually coming back on track, it will support the economic recovery slowly.
• Chinese banks will take a hit from a rise in bad loans as retail customers and small businesses are more vulnerable. Banks could see a rise in their delinquency rates, resulting in higher non-performing assets. To aid small businesses, in May 2020, the Chinese government allowed SMEs to delay loan repayments until March 2021. Additionally, all the major commercial banks are also mandated to increase their loans to small businesses by 40% in 2020.

Reasons to Buy

• Make strategic decisions using top-level revised forecast data on the Chinese retail lending and deposit industry.
• Understand the key market trends, challenges, and opportunities in the Chinese retail lending and deposit industry.
• Receive a comprehensive insight into the total consumer loans in China, including mortgages, personal and credit card loans as well as retail deposits balances.