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Review of the development of China’s banking industry in 2020 and prospects for 2021 From Deloitte Consulting

The following is the Review of the development of China’s banking industry in 2020 and prospects for 2021 From Deloitte Consulting recommended by And this article belongs to the classification: Chinese economy, Deloitte Consulting , research report.

2020 is the closing year of the 13th five year plan, which is also an extraordinary year in history. During this year, China’s banking industry has experienced COVID-19’s test, actively supported the real economic recovery, and has been able to deal with all risks and challenges, and has continued to maintain a steady and healthy operation. In 2020, the banking industry will continue to maintain a rapid growth in asset size and asset quality. According to the index data released by the CIRC, the total assets of the banking industry at the end of the year were 319.7 trillion yuan, up 10.1% year on year, and the non-performing loan ratio was 1.84%, down 0.02 percentage points from the end of 2019; Efforts were made to increase the support for key areas and weak links of the real economy, focus on the “six stabilities” work and the implementation of the “six guarantees” task. RMB loans increased by 19.6 trillion yuan in the whole year, an additional 2.8 trillion yuan year-on-year, and loans for inclusive small and micro enterprises increased by 30.9% year-on-year. Financial institutions in the banking industry strengthened their ability to resist risks through multiple channels, and kept the bottom line of avoiding systemic financial risks. In the whole year, they disposed 3.02 trillion yuan of non-performing assets, drew 1.9 trillion yuan of new provisions, and drew 113.9 billion yuan more than the same period last year. At the end of the year, the provision coverage rate was 182.3%, and the loan provision rate was 3.5%, which maintained a high level.

2021 is the first year of the fourteenth five year plan, which is also of special significance in the process of China’s modernization. At present, there are still many uncertainties in the evolution of the epidemic situation and the external environment, the foundation of economic recovery is not solid, and various derivative risks caused by the impact of the epidemic situation can not be ignored. With the comprehensive opening up of the financial industry and the deepening of interest rate marketization reform, different economies are developing towards differentiation on the road of recovery. Market competition will continue to squeeze the income space of interest rate differentials of banks, and it is time to implement differentiation competition strategy. In addition, the development of financial technology continues to advance in depth, and the supervision of financial technology puts more emphasis on macro prudence. In the process of digital transformation, financial institutions need to attach great importance to network and data security, personal privacy and consumer protection, and focus on the transparent use of technology power and the ownership and security of data assets. In the process of moving from a big financial country to a powerful financial country, the opportunities and challenges faced by commercial banks are changing from system to diversity. Commercial banks need to size up the situation and respond to the needs of supervision, competition and technology upgrading.

China Banking 2020 development review and 2021 outlook is the 13th report of Deloitte China financial services research team. Taking 8 representative domestic commercial banks as samples and 6 overseas systemically important banks as benchmarking, the report systematically analyzes the profitability, asset status, liabilities and capital strength of China’s listed banks, and reveals their achievements in 2020 and the direction of future improvement. Compared with the past, the analysis report released this year presents two obvious characteristics: first, the introduction of risk weighted return on assets (rorwa), risk adjusted return on capital (RAROC) and other indicators that can better reveal the core competitiveness of commercial banks, which improves the depth, accuracy and information content of the analysis; The second is to fully mobilize Deloitte’s expert resources to conduct in-depth analysis on key and hot topics such as green finance, asset management and financial management, financial technology supervision, data empowerment, capital replenishment and low-carbon transformation, providing unique insights and insights. We believe that this research report will provide a valuable reference for Chinese commercial banks to start a new chapter in the new journey of the 14th five year plan.

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