China banks may surprise with unexpectedly stronger loan growth

2H14 earnings likely in-line as well.

It has been noted that China banks’ mortgage loan growth could be stronger than expected.

According to a research note from Barclays, meanwhile, 2H14 earnings are also likely to be in-line, which it noted has an average 9% by its forecast.

At least two banks confirmed that they see mortgages as relatively attractive on a risk-adjusted basis, versus SME loans.

Demand could grow in 2H14, particularly if there is more policy loosening, i.e. cutting down payment or 2nd mortgage rate.

Meanwhile, the NIM outlook in 2H14 is steady for large banks and slightly lower for joint-stock banks. NPLs will likely continue to rise in 2H14 measurably (avg. 9% for 2014).