China medium and small banks:An assessment of Brexit and China’s monetary conditions
While the general Chinabanking sectoris braced for the chills fromthe market turmoil caused by the Brexit, the mid-and small-sized Chinese banks would be barely affected,in our view.
We believe PBoCwill maintain its loose monetarystance, with credit supply growingat a rapid pace and the monetary multiplierexpanding, which are favourable forthe mid-to small-sizedbanks at the growth stage.
On the flip side, RMB devaluation is the key risk for Chinese banks (and all RMB assets), which would be moderate and in a gradual pace in our view.Meanwhile, we believe the growth factorswill outweigh the currencyrisksfor mid-and small-sized Chinese banks.