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China bank points to SARS for Q2 slide

China bank points to SARS for Q2 slide

(China) China Merchants Bank has posted a 4.4 percent net earnings slide for the second quarter citing the SARS virus for the decline in nationwide credit growth. The bank, which is the largest of China’s four listed lenders, saw its profit dip to 552.16 million yuan (US$66.71 million) compared with 577.60 million yuan for the same period last year.

A spokesman for the bank said "the outbreak of SARS had a clear negative impact on our operations".

"We also can’t afford to ignore the lagging effect of the disease," he said.

The bank said increased competition in the banking industry had made it harder to develop new markets.

This threat of excessive lending has been heightened by an economy running on over-drive, causing China’s central bank to halt the rate of lending. According to analysts, the country’s broad money supply jumped 20.7 percent in July alone.
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