DUBLIN, Ireland, Aug 11, 2008 (BUSINESS WIRE) ----Research and Markets (http://www.researchandmarkets.com/research/83ae64/china_commercial_b) has announced the addition of the "China Commercial Banking Report Q3 2008" report to their offering.

Over the last year, the crisis in the inter-bank market, and the soaring prices of oil and other raw materials, have tended to obscure several other important trends. In most of the developing world (i.e. the vast majority of the countries whose banking industries are surveyed by BMI), lending has been growing quickly. In many emerging markets, inflationary pressures have been boosted by a rapid increase in credit. In a number of emerging markets, macro-economic imbalances are evident.

The figures on the tables above provide a snapshot of the banking sector in China and the changes that have taken place within it over the last year. To place the figures in context, it may be useful to bear in mind certain aspects of the 59 countries whose banking sectors are currently surveyed by BMI. Across this sample, the median growth in assets in local currency terms was 21.3% (in Colombia). The median loan growth was 21.6% (in India). The median growth in deposits was 17.9% (in Brazil). On their own, the ratios of loans to deposits, assets, and GDP mean little. However, they can provide useful hints when combined with other data. Across the 59 countries, the median loan/deposit ratio is 92.3% (in Greece). The median loan/asset ratio is 56.0% (in Poland). The median loan/GDP ratio was 63.9% in India.

From Q308 we have included a new section that examines the risks associated with each country's banking sector in a new way. We have essentially sought to ask this question: to what extent will the banking sector likely need to source funding from banks in the rest of the world over the course of 2008? Given that the answer is not necessarily, on its own, meaningful, we have looked at other key issues such as the size and recent movement in the loan/deposit ratio, macro-economic developments and recent movements in financial markets.

Two general themes pervade the banking sectors of the Asia Pacific region. The first is that the excess savings within greater China and Japan remain enormous and are likely to grow. One expression of this will be the continuing growth in bank deposits that is, in absolute terms, considerably greater than the growth in lending. The second is that central banks have, in much of the region, been moving to tighten monetary policy. This has already had an impact on the behaviour of the banks.

Over the last year, Latin America has been a major beneficiary of the pick up in investors' appetites for risk. Yields on bonds have been falling, and the compression of yield spreads has been larger than in other parts of the world. In every one of the Latin American countries monitored by BMI, the loan/deposit ratios have been rising. Current account and budgets are, for the most part, balanced. Collectively, the banks are sourcing funds from the rest of the world in order to lend to non-bank customers.

As in previous reports, we include a SWOT analysis for China. Taking a long-term view, the absolute size and growth potential of the banking sector are enormous. In the short-term, though, the way in which the authorities respond to mounting inflationary pressures will be crucial for the economy and, indirectly, for the banking sector. Loan growth has been markedly slower in China than in other developing countries surveyed by BMI. The clear implication is that the increase in the Reserve Requirement Ratio (RRR) and other measures to constrain the growth in credit have had an impact.

Since Q108, we have calculated, on a consistent basis, a Commercial Bank Business Environment Rating (CBBER) for each of the 59 countries surveyed. The CBBER includes an assessment of the limits of potential returns. It does this by taking into account the size, growth potential and bancassurance potential of the banking sector, as well as aspects of the economy in 2007. The CBBER also depends on an assessment of the risks to the realisation of potential returns. This reflects BMI's assessments of overall country risk, together with the regulatory and competitive environment.

China's overall CBBER is 70.5. The banking market structure elements of the limits to potential returns have, unsurprisingly, a higher score than the country structure elements (87.5 versus 50.5). Conversely, the banking risks elements of the risks to the realisation of returns have a lower score than the country risk rating (58.3 versus 70.0).

Key Topics Covered:

Executive Summary

Table: Levels (CNYbn)

Table: Levels (US$bn)

Table: Levels At December 31 2007

Table: Annual Growth Rate Projections, 2007-2012 (%)

Table: Ranking Out Of 59 Countries Reviewed In Q208

Table: Projected Levels (CNYbn)

Table: Projected Levels (US$bn)

Key Issues

China Commercial Banking SWOT

Changes To The Commercial Banking Report

Commercial Banking Business Environment Rating

Table: China's Commercial Banking Business Environment Ratings

Table: Asia Commercial Banking Business Environment Ratings

Anticipated Development

Table: Anticipated Developments In 2008 - Loans And

Table: Anticipated Developments In 2008 - Interbank Rates And Bond Yields

Bank Lending

Lending Overview

Table: Lending Overview (CNYbn)

Total Assets, Client Loans And Client Deposits

Table: Comparison Of Total Assets, Client Loans And Client Deposits (US$bn)

Per-Capita Deposits

Table: Comparison Of Per-Capita Deposits, Late 2007

Macroeconomic Trends And Developments

Table: China - Economic Activity

Industry Forecast Scenario

Table: Annual Growth Rate Projections, 2007-2012 (%)

Table: Projected Levels (CNYbn)

Table: Projected Levels (US$bn)

Comment On Developments Over Last Year

Comment On Forecasts

Comment On Trends Snd Ratios

Table: Comparison Of Loan/Deposit, Loan/Asset And Loan/GDP Ratios, Late 2007/ Early 2008

Banks' Bond Portfolios

Table: Bond Portfolios, Late 2007

Competitive Landscape And Protagonists

Methodology

Basis Of Projections

Commercial Bank Business Environment Rating

Table: Commercial Banking Business Environment Indicators And Rationale

Table: Weighting Of Indicators

For more information visit http://www.researchandmarkets.com/research/83ae64/china_commercial_b

SOURCE: Research and Markets Ltd.

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