Retail Banking in China: Coronavirus (COVID-19) Sector Impact

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 significantly impacted the global economy, with key stock markets across the world losing 20-50% of their value for the year-to-date. Many economists and institutions have cut their forecasts, with many experts predicting the potential onset of recessionary environments.

A similar trend is expected in China, as economic growth in the country is set to have dipped in the first quarter of 2020 and will decline further if the disease relapses. The real GDP growth rate for China is expected to decelerate in 2020. The decline will have an adverse impact on all sectors, including the banking industry.

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. Given the expected scale and length of the disruption to the Chinese economy, it is no surprise that key banking indicators will suffer.
- 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. So far, China has not intervened in this area in any major way, but other countries are seeing banks relaxing loan repayment requirements for consumers particularly impacted by the outbreak, as well as governments increasing social payments to citizens.

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.