Only four Chinese banks pass DBS’ stress test
(27 June 2019 – China) China Construction Bank and China Merchants Bank are seen as the two most resilient Chinese mainland banks capable of withstanding an extreme economic downturn because of their strong capital base, according to a stress test conducted by DBS Bank.
Only two other banks – Chongqing Rural Commercial Bank and Bank of Shanghai – passed the Singaporean bank’s stress test involving a total of 19 lenders, which represent 76 percent of the assets in China’s banking industry.
China’s banking industry will need to raise 2 trillion yuan (US$291 billion) to replenish their capital in the event of three bear scenarios, DBS told a press conference on Wednesday in Hong Kong to announce the results of the study.
Chinese banks have been in the spotlight this week for working with a Hong Kong front company accused of laundering more than US$100 million for North Korea.
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