Chinese banks, including the world’s largest credit institution Industrial & Commercial Bank of China (ICBC), are facing a shortage of money and are going to borrow a record amount. Banks plan to issue $ 29 billion in bonds in September 2020, Bloomberg writes, citing sources.
Raising funds is necessary for ICBC, Bocom and Guangfa in order for banks to replenish funds and stabilize their financial situation. Credit institutions ‘ capital was hit by huge demand for cheap loans from local businesses during the coronavirus pandemic, as well as falling profits due to late loan payments.
Earlier it was reported that the largest banks in China faced a record drop in profits for a decade due to the growth of non-repayable debts and assistance to the country’s authorities in stimulating the economic recovery. According to the forecast of the International monetary Fund (IMF), China’s economy will grow by only 1 percent by the end of 2020, which will be the lowest result in the last 40 years.