Loan growth, easing provisions, low valuations among factors that will lift China bank shares
Investors who like the country's long-term growth story should consider scooping up the Big Four banks' shares while valuations are still cheap
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LOOKING ahead to 2021, we favour China's Big Four banks for their strong position in the industry and cheap valuations. As China stays on track to become the world's largest economy, we see numerous earnings catalysts to support the Big Four banks' share prices and earnings in the next few years.
Easing loan loss provisions
For the Big Four banks' FY2020 results, pressure from bad loans is expected to drag on their earnings; they have had to set aside a huge amount of reserves for possible losses arising from the pandemic.
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