Analysts are predicting that the........>

CHINA PRESS: Analysts are predicting that the scale of interbank negotiable

certificate of deposits (NCD) issuance will shrink significantly in the second

half, with profits from NCDs also dropping sharply, the China Securities Journal

reported in a front-page story Friday. Guangdong province's banking regulator

fined one bank CNY2 million for breaking NCD "business operation rules",

prompting discussion and shock in the market, and indicating that regulators

will continue to tighten oversight and levy more fines in the period ahead. An

interbank insider told the newspaper that banking regulators recently closely

examined many details of his bank's operations. The source said his bank's

interbank business had earned a profit of several hundred million yuan in the

past two years through a branch under the bank's Guangzhou City division, but it

would be lucky to earn a profit of CNY20 million to CNY30 million in the first

half of this year given the tighter regulatory climate. Analysts also told the

newspaper the property market is cooling down and "returning to a reasonable

level," so banks' profits from lending to the sector are also shrinking. (China

Securities Journal)