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China's Banking Sector Outlook Stable, Says Moody's

The outlook for China's banking sector is stable, Moody's Investors Service said in its China's Banking System Outlook report on Thursday.

The stable outlook suggests that the economy will grow in a 7.5 percent - 8.5 percent range, which is representative of a "soft landing", and consistent with an environment that will allow China's banks to maintain profitability and manage a likely gradual rise in credit costs, Yi Zhang, a Moody's Vice President and senior analyst said at the launch of the report.

Also, the stable outlook reflects solid capital and loss-reverse levels of banks and their strong deposit funding base, and very low vulnerability to external liquidity shocks.

In a separate report, the rating agency said the outlook for Hong Kong's banking system is also stable. Hong Kong banks' credit ratings continued to be supported by their solid financial fundamentals, with sound capitalization, good profitability, and maintenance of strong asset quality metrics.

by RTTNews Staff Writer

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