S&P: Chinese banking sector to remain stable in 2009

HONG KONG: Standard & Poor's Ratings Services (S&P) believes that the Chinese banking sector will remain stable in 2009, even though it expects the NPL (non-performing loan) ratio to rise by 204 basis points.

Speaking in a teleconference yesterday, S&P primary credit analyst Liao Qiang noted that the People's Bank of China has made a dramatic U-turn in recent months to shift its monetary stance toward an expansionary policy.

"The measures could undermine underwriting standards, and reduce profitability and capitalization (to the lenders)," he said.