Shares of Chinese banks are trading lower in Hong Kong, with China Merchant Bank down 3.9%, Bank of Communications down 2.8%, Agricultural Bank of China down nearly 2%.
Goldman Sachs lowered the ratings of ICBC and Agricultural Bank of China to Sell and lowered target price of other Hong Kong-listed Chinese banks. It also lowered its forecast for large Chinese banks’ profit before provisions by 5% and 6% for 2023 and 2024.
The impact of margin risk from local government debt and increased losses in credit portfolios may weaken earnings growth and may lead to further adjustments for mainland banks, Goldman Sachs in a note.
