Chinese bank shares fall on leverage concerns

Chinese bank shares have fallen this year partly due to concerns about non performing loans, but while this will inevitably cause problems for lenders, analysts believe a major recapitalization of the sector won’t be necessary. Since the start of 2016, shares in Bank of China have fallen by 9.25%, those in Agricultural Bank of China by 9.46% and ICBC by 8.55%. “I think the banks’ share prices reflect concerns about asset quality,” Louis Tse, director at VC Brokerage, told the South China Morning Post. Tse said that although there had been a rally in the last week, it was “mostly to do with investors wanting to get the dividends” that the banks will offer.