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China banks see profits slow
央企利潤去哪兒了 銀行收益下降
Net profit growth for China’s listed banks continued to slow in 2013. Net interest income for lenders dropped but their fee income from intermediary businesses was on the rise, suggesting that the institutions are depending less on the traditional lending business.
The net income of China’s listed banks grew close to 13 percent last year, down from 17 percent in 2012. Liberalization of the interest rate was having a significant impact on the net interest margin of listed banks.
Slowing asset growth and tightened regulatory requirements for loan provisions were also dragging down growth. Meanwhile, the non performing loans ratio of the listed banks had increased to 0.97% at the end of 2013 from 0.92 at the end of 2012.
"The silver lining is the banks’ income from their intermediary businesses has been expanding. Fees and commission income grew 23 percent in 2013, up from 12 percent in 2012, representing one fifth of the total operating income. But competition is undoubtedly fierce in the era of internet banking." Geoffery Choi, Partner, Ernst&Young Greater China said.
"The trend is continuing in 2014. In the first quarter, net profit growth continued to slow. Net interest margin’s contribution to total income continues to decrease while fee and commission income’s contribution is still on the rise. Non performing loans ratio also continued to increase in the first quarter of 2014 to 1.01 percent." Geoffery Choi said.
