Fitch warns on Chinese banks' problem loan build up.

(From Fundweb)

Byline: Gary Jackson

Fitch Ratings has warned about the health of China's financial sector, highlighting the rapid expansion of Chinese banks' balance sheets over the opening half of 2012.The ratings agency notes that Chinese banks' first-half results suggest asset quality and earnings are starting to be damaged by slowing economic growth and declining corporate profitability.

However, the country's banks have expanded their balance sheets at a "brisk pace" in spite of the deterioration in asset quality, Fitch says. Assets increased by an unannualised 11.9 per cent in the first six months of 2012, making it the second-fastest first-half rise …