Thursday, March 15, 2012
BEIJING, March 15 Asia Pulse - Standard and Poor's (S&P) maintained a stable outlook on Tuesday for China's banking industry in a report, despite that the non-performing loans (NPLs) of the industry may rise due to the economic slowdown and tightening liquidity.
S&P, one of the larges rating agencies, warned that exporters, especially small ones, would suffer from rising labor cost and decreasing export, and some borrowers in certain industries may default if their worsening liquidity could not be improved.
Zeng Yijng, a credit analyst from S&P, said S&P had taken the volatile fluctuation of financial performance into consideration when analyzing the country risk, capital adequacy and risk exposure in China's banking industry.
Meanwhile, the report also warned the possibility of credit downgrading if China's economy falls sharply and NPLs surge as a result of liquidity risk.
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