Lenders 'stable' amid economic rebalancing

Chinese banks' asset quality will remain under pressure from economic rebalancing in the next one to two years and their profitability will deteriorate because of increasing interest rate liberalization, Moody's Investors Service Inc said on Tuesday at its annual credit risk conference.

However, most banks have the financial resources to absorb a significant amount of stress, with healthy earnings, loan-loss reserves and capital.

Moody's also expects the government to remain supportive, which contributes to an overall stable outlook.