BEIJING--China's largest banks aren't likely to see any growth in net profit next year, given the pileup of bad debt and worsening economic conditions, Bank of China economists said Monday. "In 2016, the pressure on business operating conditions for Chinese banks will worsen," it said in a briefing to reporters. The nonperforming loans ratio, which measures bad loans as a percentage of total loans, will reach around 2% for listed banks, compared with around 1.59% currently, China's fourth-largest commercial lender said. Banks' net interest margin, the difference between deposit and lending rates, will also "narrow slightly" in 2016, it said in its economic and financial outlook for the year ahead. The yuan will continue to come under gradual depreciation pressure throughout next year, it said. Bank of China forecasts the nation's economy to grow around 6.9% this year and 6.8% the next. Inflation for consumer prices is expected to rise to around 2% in 2016 from 1.4% this year, it said. Write to Chuin-Wei Yap at chuin-wei.yap@wsj.com
The Bank of China has warned that China's largest banks are unlikely to see any growth in net profit next year, due to the pileup of bad debt and its economic slowdown. In a report released on Wednesday, it said there was "considerable uncertainty" about whether Chinese lenders would be able to raise enough capital from investors or other sources to meet their targets.