China stimulus fuels banks' profit growth

Shanghai

CHINA'S ramped-up stimulus is fuelling optimism that the nation can tame a rising tide of bad debt and banks' profits will rebound.

Soured credit may start to grow more slowly during 2016 as the effects of protracted monetary easing flow through the economy, according to Hou Wei, a banking analyst at Sanford C Bernstein & Co in Hong Kong. Analysts at China International Capital Corp are watching a bad loan formation gauge, which fell in the first quarter for the first time since 2013.