January 27, 2010 / 7:38 PM / 9 years ago

DAVOS-PBOC's Zhu cautions banks on ambitious profit goals

DAVOS, Switzerland, Jan 27 (Reuters) - Banks should not target ambitious profits but look for return on equity of around 10 percent, a senior People’s Bank of China policymaker said on Wednesday.

PBOC deputy governor Zhu Min said between 2003 and 2007, global banks had an average return on equity of 14 to 15 percent, compared to 10 percent for the previous 20 years.

“For the whole financial sector maybe the return on ROE should be around 10 pct because this is very much a service sector,” he told a World Economic Forum session.

“You should not be shooting for 19, 20 percent, even more ROE.”

Zhu did not specify if he was referring to Chinese or to global banks. (Reporting by Krista Hughes and Natsuko Waki, Editing by Lin Noueihed)

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