China's mega banks lost billions of dollars in profit as bad loans rise during coronavirus pandemic

The five largest Chinese banks posted at least 10% year-on-year fall in profits in the first half of 2020 as they set aside more funds for potential loan losses in the coming months.

. But the effect of the economic slowdown on banks have not materialized fully, said Tan.

"So, these will probably come in the second half, if not in the first half of 2021 when the moratorium lifts in March 2021," he added.Morgan Stanley's analysis of the latest earnings reports by Chinese banks found that mid-sized lenders performed better than their larger peers in terms of operating profits before taking into account provisions set aside for future bad debt.

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