Analysis of China’s listed banks in the first half of 2020 From Deloitte Consulting
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The following is the Analysis of China’s listed banks in the first half of 2020 From Deloitte Consulting recommended by recordtrend.com. And this article belongs to the classification: Deloitte Consulting , Investment & Economy.
Deloitte today released the report “analysis of China’s listed banks in the first half of 2020 – midstream hitting the water, striving to make progress”. It covers the overview of the economic and financial situation in the first half of 2020, as well as the mid-term performance review, financial data analysis and business observation of domestic listed banks. It compares the importance of domestic large commercial banks, six representative joint-stock banks and six overseas global systems Through the three hot topics of risk prevention and control of high-risk small and medium-sized banks, digital transformation to shape the resilience competitiveness of banks and the key points of the “14th five year plan” of commercial banks, this paper further provides detailed industry insight for the domestic banking industry and analyzes the future development trend.
Bank Performance Analysis
According to the report, in the first half of 2020, domestic banks showed good growth resilience. The total operating income of large state-owned commercial banks totaled 1735.6 billion yuan, with an average increase of 4.3%. The average growth rate of revenue of six joint-stock banks was more than 10% (totaling 598.9 billion yuan). However, the revenue of overseas banks was affected by the new epidemic, which led to obvious fluctuations in revenue. Although the average growth rate of pre provision profit of domestic banks decreased, it still maintained a certain growth, while the performance of overseas banks was different. The total net profit attributable to shareholders of the parent company of large state-owned commercial banks and six joint-stock banks was 566.3 billion yuan and 168.4 billion yuan respectively, with an average decrease of 11.2% and 7.6%. However, due to the impact of credit loss provision, the net profit attributable to the shareholders of the parent company was only 152.7 billion yuan, with an average decrease of 65.75%. In addition, the net profit of many overseas banks attributable to the shareholders of the parent company was cut back, which fully shows that the new crown epidemic, the global economic downturn and long-term overseas low interest rates have a great impact on overseas banks. Foreign banks are relatively affected by the impact.
In response to the call of the state, large state-owned banks have increased their efforts to extend credit to the real economy. In the first half of the year, the book value of loans and advances issued by six joint-stock banks was about 21 trillion yuan. The book value of loans and advances issued by foreign banks was far lower than that of the four state-owned banks (totaling about 40 trillion yuan). In addition, the executive meeting of the State Council called on the financial system to actively reduce fees and interest to the real economy (a reasonable annual profit of 1.5 trillion yuan) to reduce the financing costs of enterprises. At the same time, in the face of asset quality rebound pressure, commercial banks also increased the loan loss preparation and risk mitigation efforts. The combined influence of these factors made the net profit of domestic listed banks decline significantly in the first half of the year.
On the whole, domestic banks should maintain a certain growth toughness in the first half of 2020. They should implement counter cyclical adjustment policies around the task of “six stabilities and six guarantees”, fulfill the mission of big banks, increase support for the real economy, and timely increase the provision of impairment losses to resist future risks. In the future, we should actively formulate high-quality development strategies under the domestic and international “dual cycle” development pattern We will continue to overcome difficulties and support the development of the real economy.
However, the total profits of overseas institutions (including overseas branches and subsidiaries) of domestic banks in the first half of 2020 decreased significantly year-on-year, with an average decrease of 17%. Affected by the Xinguan epidemic and geopolitics, the overall business situation in overseas areas has declined. Deloitte believes that the risk of capital outflow is relatively low due to the national foreign exchange control, and the regulatory authorities will follow up and comply with the latest requirements of international regulatory laws and regulations in a timely manner. We suggest that domestic banks continue to improve the operation and management level of overseas institutions, strengthen corporate governance and risk control, attach importance to self-assessment and inspection, fully study and prevent the risks of overseas operations, optimize the allocation of compliance resources and operate smoothly.
Rapid response to epidemic situation and acceleration of digital transformation
During the epidemic period, the six state-owned commercial banks and six joint-stock commercial banks realized the upgrading and iteration of business models through three aspects: upgrading front-end business, strengthening risk control in the middle of Taiwan, and ensuring back-end operation. Financial technology was used to accelerate the digital transformation and ensure the stable operation of business. At present, all commercial banks have gradually promoted the construction of digital risk control capacity. Due to the direct impact of the epidemic situation on credit business, asset quality is facing great challenges. At the same time, banks are also actively issuing various loans to support the recovery of the real economy. Therefore, banks have steadily promoted the construction of digital risk control in the middle stage, and used risk control models to promote efficient access strategies and post loan early warning and investigation strategies execute.
With the transformation and upgrading of industrial structure, the effect of technology enabled financial business is prominent. Domestic large commercial banks generally pay more attention to financial cross-border capital investment and financial science and technology personnel, and put forward specific development direction and implementation plan in terms of technology development and application. Big data, artificial intelligence and other technologies have been integrated into the scene construction of bank intelligent marketing, intelligent operation and intelligent risk control. Under the epidemic situation, most domestic commercial banks focus more on the investment and improvement of information technology, and provide better services to customers from the aspects of strategy implementation, structure transformation and technical support. How to take the customer as the center, how to deeply integrate the application of financial technology with the bank’s own development strategy will become the topic of constant discussion of each listed bank in the future.
Under the background of the epidemic situation, all listed banks consciously integrate social responsibility into development strategy and operation management, implement the new development concept, actively use financial means and strength, and actively perform social responsibility in fighting against the epidemic, reducing fees and profits, poverty alleviation and green finance. In particular, in support of national sustainable development, commercial banks comply with the national policy guidance and the trend of economic transformation, continue to promote green finance, improve green credit policies, and continue to increase the scale of green credit.
Water in the middle stream
Deloitte believes that the current economic growth slowdown and increased uncertainty will test the development toughness of commercial banks, and the transformation from extensive development to connotative development will be the general trend. However, limited by different internal and external environment, the differentiation of operation level of different banks will be more obvious. Resilience will become the core quality of successful banks in the future. Through the comprehensive digital transformation, it will help to shape the resilience competitiveness of banks. By using data analysis, intelligent drive, flexible architecture and cost reduction and efficiency increase, banks can grasp external risks in advance, judge quickly, change quickly, and strengthen business endurance, so as to prepare for various uncertainties in the future.
Discussion on hot topics of other financial services industry:
Preventing risks and deepening reform — risk concerns and Countermeasures of small and medium sized banks
Digital intelligence escort, through the cycle
Looking for new opportunities in the uncertain environment, starting as the end and developing tenaciously
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