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China banking industry
- 1. China Banking Industry #Top Four Banks of China and World Banks Asset Under Management (2018)(US$ billion) Industrial and Commercial Bank of China 4,009.26 China Construction Bank Corporation 3,400.25 Agricultural Bank of China 3,235.65 Bank of China 2,991.90
- 2. GDP growth of China GDP growth being highest in 2010, prompted the credits to outpace the GDP by 1 US$ trillion. In 1995, GDP, Deposit and Credits all grew with 30% growth rate. Growing with a lower rate after that, achieved the same level of growth in 2008-11 Currently, credits at 15 US$ trillion is growing at 13%, while GDP at 11 US$ trillion at lower rate of 6% and finally deposits being at 5US$ trillion is growing at the rate of 8%. 0 2 4 6 8 10 12 14 16 18 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Bank Credit and Deposit as compared to GDP (US$ trillion) GDP Bank Deposit Bank Credit 0% 20% 40% 60% 80% 100% 120% 140% 160% 180% 0 2 4 6 8 10 12 14 GDP (US$ trillion) GDP (US$) Growth %
- 3. Per Capita Income Per Capita Income grew highest in 2010 by 160%, when depositor grew highest by 13% Latter in 2013, growth in depositor was 4% more than borrowers, currently being 3% less. 0% 20% 40% 60% 80% 100% 120% 140% 160% 180% 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 Per Capita Income (US$) Per Capita GDP(US$) Growth 0% 5% 10% 15% 20% 25% 30% 35% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Depositor growth to Per capita Income growth% Growth in Depositor Growth in Per capita Income 0 50 100 150 200 250 300 350 400 450 500 2011.5 2012 2012.5 2013 2013.5 2014 2014.5 2015 2015.5 2016 2016.5 Depositers & Borrowers (million) Deposit Account No. (Small and Medium Enterprise) (million) Borrowers No.(million)
- 4. Bank Performance Return on Equity for Banks was highest in 2014 at 21%, growing highest in 2002 at 127% when interest and NPA rates were reducing NPA was highest 2001 at 30% of total loans, With Return on Equity on upward trend and interest rates on reducing. 2001-02 was the time when GDP, per capita income all were on increasing trend. 0 5 10 15 20 25 30 35 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Bank Non-Performing Loans to Gross Loans for China % - 2.00 4.00 6.00 8.00 10.00 12.00 14.00 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Interest Rates% Lending rate% Deposit rate % -60% -40% -20% 0% 20% 40% 60% 80% 100% 120% 140% 0.00 5.00 10.00 15.00 20.00 25.00 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Return on Equity % Bank Return to Equity% Growth
- 5. Bank Book 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Bank Capital to Total Asset% 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 Bank Concentration for top 3 banks of China% 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 Bank Interest revenue to Average Interest Bearing Asset% Bank revenue increased highest in 2002 by 65% while the capital growth was highest in 2006 The concentration of banks too was highest in 2001-02 The period of 2001-06 was marked by increased per capita income and borrowers.
- 6. Conclusion Thus we may say, • Improved Bank Performance 2001-02 • Improved Bank Books 2002-06 • Improved GDP and Per capita Income, Credit and Deposits 2010