2017 Q2 China’s banking sector: Performance of ... | KPMG | CN

2017 Q2 China’s banking sector: Performance of listed banks and hot topics

2017 Q2 China’s banking sector: Performance of ...

This report examines the key topics and performance indicators of China’s banking industry in the second quarter of 2017.

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Since 2017, with the ongoing deep development of China’s banking sector reform, banks have continued to make strategy adjustments and optimise their asset and liability structures in tandem with their income structures. Based on the semi-annual reports of 39 listed banks, China’s banking sector continued to support the real economy with the expansion of credit assets.

At the same time, the scale of interbank assets fell and the growth of investment slowed down, affected by the stricter Macro Prudential Assessment (MPA) system and interbank risk regulations. In addition, the semi-annual reports show that the NPL ratio of listed banks fell marginally – by 0.01 percent – and that the quality of bank assets remained stable.

During the first half of 2017, all but three of the 39 listed banks recorded an increase in their profit attributable to shareholders of the parent company. Still, ongoing interest rate liberalisation, interest rate levels and FX fluctuation in the first half of the year, meant listed banks have faced considerable challenges in raising profit levels.

The report also provides an in-depth analysis of the key issues affecting the banking sector, including special campaigns by the China Banking Regulatory Commission against “Three Violations, Three Arbitrages and Four improprieties”, the development of the Belt and Road Initiative, as well as the potential impact of Notice No. 56 – issued by the Ministry of Finance and the State Administration of Taxation – on the banking sector.

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