Analysts: state banks face harder times in 2H

China’s state-held banks will likely see their first-half profit growth cut by higher funding costs in the second half and into 2009, according to analysts spoken to by Reuters. Chinese lenders are expected to post robust profit growth figuress for the first half of the year due to wider margins and strong fee income. But asset quality is expected to deteriorate as property companies face credit tightening restrictions and exporters are squeezed by higher costs and a weakening US economy. "We think this year’s high earnings growth will not be sustainable into next year," said Y.K. Lee, analyst at Core Pacific-Yamaichi.