This report provides in-depth analysis on topical issues to help readers understand the related potential impact on – and future direction of – China’s banking industry.
In 2017 Q3, we noticed that the real economy recovered gradually, pressure on the quality of credit was reduced, and the non-performing loan ratio remained stable. Based on figures and information from 32 listed banks’ 2017 Q3 reports, the scale of listed banks’ credit assets increased steadily. However, due to the lagging effects existing between the real economy and financial system, the credit increment is still relatively insufficient, and listed banks’ loans and advances grew at a slower pace. At the same time, regulatory authorities continue to promote oversight of interbank business risk, which led to the limited scale of interbank business and the lower growth rate of listed banks in 2017 Q3 compared to the first half of the year.
In the first three quarters of 2017, of the 32 listed banks that disclosed data, only two experienced a decline in net profit attributable to shareholders of the parent company. The remaining recorded an increase, but at different rates. The total net profit increased by 5.03 percent, which doubled the growth rate over the same period last year. The scale of net profit increased steadily with the expansion of the business scale, however, due to the reduced net interest margin, the banking industry is still facing considerable challenges in improving profitability.
This report also analyses the digital transformation of traditional banks driven by fintech, reformation of human resource management in the banking industry, and the impact of artificial intelligence (AI) in commercial banks.