China's top 10 banks brace for slump

China's top ten banks will register slower growth during the rest of the this year due to economic slowdown and overdue loans, according to a report.

The ten banks covered in the report include the Industrial and Commercial Bank of China, China Construction Bank, Bank of China, Agricultural Bank of China, Bank of Communications and China Merchants Bank.

According to a report by PricewaterhouseCoopers, China's declining product managers' index in August showed the domestic demand is still weak and the economic outlook in Europe, the United States and Japan remains gloomy,

China's policy makers may cut the interest rates again to boost the economy, narrowing the interest-rate spreads for lenders.

The average overdue rate among the ten listed banks rose to 1.28 percent in the first half from 1.06 percent at the end of 2011, adding to their pressure from bad loans.

"The banks' growth rate certainly won't reach the level of previous years," said Jimmy Leung, PwC China Banking & Capital Markets Leader. "Still, banks will grow by at least 10 percent this year, but it will depend on banks' risk management and business models to see if they can maintain 17 percent growth for the whole year."

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