Many shareholders will be on the lookout for indications that private lenders have enhanced already stronger buffers to give them more wiggle room to step up lending in an eventual recovery. Although the relaxing of regulations on asset quality and low interest rates will likely help prop up profit, it may only be a short reprieve. Kwok says she is looking for any further deterioration in asset quality in upcoming results that may be masked beneath improved earnings. Asset quality risks are suppressed under the regulatory relaxations which are likely to manifest over a protracted time-frame well after March 2023." This will “delay improvements to the asset quality that has been underway in the past two-three years."

Source: Mint July 18, 2021 19:52 UTC