In 2019, the performance of listed banks will grow steadily, fintech empowerment transformation will accelerate

Source: PwC 2020-05-28

PwC ’s banking newsletter “On Stability, Progress, and Transformation: 2019 Chinese Banking Industry Review and Outlook” released on April 24 shows that China ’s listed banks ’net profit and operating income will maintain steady growth in 2019, and credit Asset quality is showing a trend of differentiation. With the deepening of interest rate marketization reforms and the impact of the new coronary pneumonia epidemic, the banking industry has accelerated its transition to financial technology and digitalization.

This issue of the Banking News survey covers 37 A-share and / or H-share listed banks that disclosed their 2019 annual reports as of April 22, with a sample size equivalent to 71.37% and 76.77% of the total assets and net profit of Chinese commercial banks. According to their characteristics, 37 banks are divided into large commercial banks (6), joint-stock commercial banks (7) and urban and rural commercial banks (24).

In 2019, 37 listed banks achieved a net profit of 1.53 trillion yuan, a year-on-year increase of 6.68%. Among them, the growth rate of large banks is 5.63%, and the growth rates of joint-stock banks and urban and rural commercial banks are 11.44% and 5.14%, respectively. The income of various types of listed banks will increase steadily in 2019, and net interest income will still account for the highest proportion. Fees and commission income accounted for the largest proportion of joint-stock banks. The fee and commission income of large banks and joint-stock banks are mainly concentrated in bank card fee business. The fee and commission income of urban and rural commercial banks account for a relatively low proportion of operating income.

In 2019, the total assets of listed banks continued to grow. As of the end of 2019, the total assets of 37 banks reached 171 trillion yuan, an increase of 8.88% year-on-year. Among them, the growth rate of joint-stock banks is relatively fast, reaching 11.09%.

Yang Shangyuan, partner of PwC's Mainland China financial industry, said : "In 2019, in the face of the complexity and uncertainty of the external economic environment, listed commercial banks' ability to withstand risks continues to increase, and overall performance has maintained steady growth, not only net profit growth Stability is rising, the scale of assets and liabilities continues to expand, and the capital adequacy ratio is stable. This has laid a solid foundation for coping with the extraordinary period in 2020. "

In 2019, the loan structure of listed banks was further adjusted, and the proportion of retail loans continued to rise. Among them, large banks and joint-stock banks increased by 13% and 16% year-on-year, respectively, and the proportion of retail loans in all loans increased by about 1 percentage point; the growth rate of urban and rural commercial banks was 28%, an increase of 2 percentage points. Housing mortgage loans are still the main driver of retail loan growth.

PricewaterhouseCoopers China's financial partner Yao Wenping said: "In 2019, listed banks have increased credit support for small and micro enterprises to continue to implement the country's strategic development plan for inclusive finance. While providing credit to small and micro enterprises, it is necessary to pay more attention to the prevention and control of credit risks of small and micro enterprises, dynamically identify and track potential credit risks, and properly resolve possible credit losses. "

2019 is a critical year during the transition period of the "New Asset Management Regulations." The scale of non-standard investment of listed banks continued to shrink, and the scale of bond investment continued to grow. Large-scale bank bond investment reached 30.63 trillion yuan, an increase of 10% year-on-year; joint-stock bank bond investment reached 6.83 trillion yuan, an increase of 23% year-on-year; urban and rural commercial bank bond investment reached 2.38 trillion yuan, an increase of 10% year-on-year. Large commercial banks continued to increase their government bonds in 2019, while joint-stock commercial banks invested more in corporate bonds.

As of the end of 2019, the balance of non-performing loans of six large commercial banks was 839.792 billion yuan, an increase of 4.07% from 2018; the balance of non-performing loans of seven joint-stock commercial banks was 301.655 billion yuan, an increase of 5.83% from the end of 2018. The NPL ratios of these two types of banks have generally declined from the end of 2018. The scale of urban and rural commercial banks' non-performing loans reached 99.027 billion yuan, an increase of 20.31% from the end of 2018; the non-performing loan rate also increased, showing a "double-rising" trend.

In 2019, the capital adequacy ratio of listed banks rose steadily. The capital adequacy ratio of large-scale commercial banks at all levels has generally risen, while joint-stock commercial banks have mainly benefited from the continuous growth of profits, while at the same time using convertible bonds and perpetual bonds to further supplement capital. Although the performance of urban and rural commercial banks varies, more than half of them still achieve an increase in the capital adequacy ratio.

Since 2020, the sudden new coronary pneumonia epidemic has severely tested the economic situation at home and abroad, and the market and regulatory environment faced by listed banks are also full of pressure. More than ever before, the banking industry needs to use the word "stable" as the starting point to effectively promote the transformation of various businesses.

Yang Shangyuan, a partner of PwC Mainland China's financial industry, believes: "The new crown epidemic has brought many challenges to listed banks' business performance, asset quality, and debt management in 2020, but it has also catalyzed the digital development of finance. Perseverance is the key to the prevention and response of listed banks. Under the current complex domestic and international economic and financial situations, listed banks should vigorously promote the in-depth integration of finance and technology, accelerate the transformation of fintech empowerment, and put technology finance in a strategic position Highly, deepen the transformation strategy. "

Editor's Note:

The 37 listed banks analyzed in this issue include:

Large commercial banks (6): Industrial and Commercial Bank (ICBC), Construction Bank (CCB), Agricultural Bank (ABC), Bank of China (BOC), Bank of Communications (Bank of Communications), Postal Savings Bank (Postal Savings)

Joint-stock commercial banks (7): China Merchants Bank (China Merchants Bank), China CITIC Bank (CITIC), Minsheng Bank (Minsheng), China Everbright Bank (China Everbright), Ping An Bank (Ping An), Hua Xia Bank (Hua Xia), Zheshang Bank (Zheshang) )

City Commercial Banks and Rural Commercial Banks (24): Bank of Jiangsu, Huishang Bank, Shengjing Bank, Zhongyuan Bank, Tianjin Bank, Changsha Bank, Harbin Bank, Chongqing Bank, Zhengzhou Bank, Jiangxi Bank, Guizhou Bank, Qingdao Bank, Jiujiang Bank, Suzhou Bank, Gansu Bank, Jinshang Bank, Luzhou Bank, Xi'an Bank, Chongqing Rural Commercial Bank, Guangzhou Rural Commercial Bank, Zijin Rural Commercial Bank, Jiutai Rural Commercial Bank, Wuxi Rural Commercial Bank, Jiangyin Rural Commercial Bank

In 2019, the performance of listed banks will grow steadily, fintech empowerment transformation will accelerate

Subscribe to Our Newsletter!

Subscribe to Our Newsletter!