Chinese banks' 1.42% margins reveal why your portfolio needs these alternatives
Key Points
- Chinese banks are struggling with net interest margins at 1....
Chinese banks are currently experiencing what economists politely call "challenging conditions" - which is finance-speak for "things are going about as well as a paper umbrella in a thunderstorm." With net interest margins hitting 1.42% in June, these institutions are now earning less profit per dollar loaned than a teenager makes babysitting.
To put this in perspective, banks need at least 1.8% margins to stay healthy. At 1.42%, they're operating in what analysts call the "danger zone" - not the fun Top Gun kind, but the "we might need another government bailout" variety.
**The Squeeze Play...
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