{"id":134716,"date":"2023-10-30T14:39:14","date_gmt":"2023-10-30T14:39:14","guid":{"rendered":"https:\/\/fin2me.com\/?p=134716"},"modified":"2023-10-30T14:39:14","modified_gmt":"2023-10-30T14:39:14","slug":"china-economy-contagion-warning-after-banks-576m-loss","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/china-economy-contagion-warning-after-banks-576m-loss\/","title":{"rendered":"China economy ‘contagion’ warning after bank\u2019s \u00a3576m loss"},"content":{"rendered":"

Standard Chartered’s CFO on bank’s performance<\/h3>\n

Chinese financial \u201ccontagion\u201d may spread to the rest of the world after a British bank lost more than \u00a3500million \u201cbetting big\u201d on the country, a UK-based expert has warned.<\/p>\n

The world\u2019s second-largest economy has been under the microscope in recent months, especially after Country Garden, one of its largest property developers, hit the skids in August.<\/p>\n

Reports in the South China Post suggested the company was bracing itself for a loss of between 45billion and 55billion yuan (\u00a34.88billion to \u00a36billion), compared with earnings of \u00a3210million in the first half of last year.<\/p>\n

Tax consultant Bob Lyddon, the founder of Lyddon Consult, told Express.co.uk: \u201cProblems in China have now come to the surface at Standard Chartered Bank, which has bet big on the country, buying into China Bohai Bank.\u201d<\/p>\n

A \u201cwrite-down” of that investment by \u00a3596million ($697 million) cut Standard Chartered\u2019s profits for the third quarter of 2023 by 54 percent compared to the same period in 2022, Mr Lyddon pointed out.<\/p>\n

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He continued: \u201cStandard Chartered has also built up its own portfolio of loans to Chinese borrowers, and not rock-solid ones.<\/p>\n

\u201cIt has had to create a provision for losses on loans into the Chinese commercial property sector of $186million.<\/p>\n

\u201cChina Bohai Bank appears to do the retail property lending and is losing its shirt on that, while Standard Chartered does the commercial property lending with the same result.\u201d<\/p>\n

Mr Lyddon said Standard Chartered had sought to characterise the loss as the result of what he called \u201cthe growing pain of the Chinese\u201d and a rough patch prior to the resumption of normal service.<\/p>\n

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