Shao Ping: Commercial Bank Business intelligence has come of ageUpdated: October 19, 2015 Views: 49
Wisdom of commercial banks operating in the true sense of the times has come. If you again choose homogenization of competition, not only will lead to greater risk, and this will be a historic development opportunity missed
After decades of prosperity
- Banking Review and Prospects
□ Shao Ping / text
In August 2015, listed companies have to disclose semi-annual report, performance 16 commercial banks out of the doldrums, net profit rose just 2.4%, while in 2013, 2014 net profit growth rate was 12.8% and 7.7% (Listed Bank net profit growth rate, from 16 listed banks earnings summary, net profit growth rate of China's commercial banks mentioned later, is derived from data released by the CBRC), some type of cliff fall. Let time and then goes forward to 2003 --2013, China Commercial Bank profit up 49 percent compound annual growth rate can be described as the 'golden years' Yet just two years time, China's banking sector is no longer the aura.
We can not help but ask, in the Chinese economy as a whole also maintained rapid growth under the circumstances, why the Chinese banking industry already feel the chill? This is the bleak autumn, or the chill of winter, or just season turns warm again?
'For Avenue, we must first of history.' I do not know why the success, or the success of the reasons I believe the wrong, is very dangerous. Thus back 'golden years' to when the road, Exploring the micro, to clarify the development of commercial banks in the past rational approach to evolution, perhaps illuminate the future of travel.
Three stages 'symbiotic' in
1978 --2003, is the establishment of a modern banking system and the development of the initial phase of this period commercial banks overall showing a 'rapid expansion of the scale of losses increasing' features 1978 the total assets of commercial banks was only 187.65 billion. Yuan, in 2003 reached 27.7 trillion yuan, an increase of 147 times, total assets amounted to 20.3% compound annual growth rate, far exceeding the growth rate of nominal GDP over the same period. However, due to large losses of state-owned enterprises, with their closely linked to non-performing loans in the form of bear most of the cost of reform of the banking sector, naturally difficult to jump out of the cycle of sustained losses. 1978 losses of the banking sector -16.6 billion in 1988 to expand to -679 billion in 1998 to further expand -1026 billion until 2000 years later, the huge non-performing assets stripped banking, business conditions began to turn around.
2003 --2013 years, ten years, is a brilliant decade in the history of China's banking sector asset size of banking institutions from 27.7 trillion yuan increased to 151.4 trillion yuan, an increase of 4.5 times a decade, from 32.28 billion profit. Yuan rose to 1.74 trillion yuan, soaring to 54 times a decade ago, the profitability of the banking sector has been among the international first-class level. At the same time, the overall NPL ratio of commercial banks from 17.9% to 1.0% weighted average capital adequacy rate increased from -2.98% to 12.19%, asset quality and capital adequacy ratio were significantly improved.
Ranked according to capital strength, China has entered the world's top 1,000 banks from 2003 to 2013 of 15 96, the world's 10 largest banks, China is an exclusive four seats. Many banks from the international experts consider to be ' technical bankruptcy ', the development of international capital markets and international investors widely recognized objects, can be described as a cloud of mud. caused by the inherent logic of such a change, it is worth us to delve into.
2003 --2007 year:. Homogeneity major period of development during which the banking sector, size and profitability of commercial banks have achieved rapid development and enhance the size of the annual five lines substantially year on year growth of 10% -25%. within the range of floating, the minimum over 7% growth rate higher scale joint-stock banks, the vast majority of more than 25% per year, individual joint-stock banks in some years even more than 40%, net profit growth rate of most commercial banks are also far ultra-scale growth, almost behind the development of the bank does not exist in the industry. However, the development model of commercial banks was highly homogeneous, single source of revenue, net interest income accounted for almost all commercial banks are at 90% -95% level.
2008 --2010 year: Within the banking credit watch 'Great Leap Forward' in 2008 4 trillion stimulus plan greatly accelerated the rapid expansion of bank loans in particular, to maintain ultra-high growth rate in the table, once the second quarter of 2009 It reached a record high of 34.4 percent, in 2009 --2010 year just two years, the banking industry added nearly 30 trillion yuan loan.
Among these, the real estate-related lending income, low risk, to become the most favored bank loans to invest in the industry: only in 2009 to invest in real estate funds reached 1.14 trillion yuan, while in 2008 this figure was only 0.76 trillion yuan, growth in mortgage loans in no way inferior to the development loans in 2009 - The 2010 new individual housing loans to 1.6 trillion yuan also the rapid expansion of local government investment and financing platform quantity and size of the financing in the period 2008 - 2009, local government financing platform loans from 4.33 trillion yuan to 7.38 trillion yuan, an increase of 70.4%, the platform loans at the end of 2010, although not publicly disclosed, but according to agency estimates that more than 14 trillion yuan, almost double the size.
2011 --2013 year: Banking Sheet Business 'Great Leap Forward' period at the end of 2013, banking institutions balance sheet business (including entrusted loans and entrusted investment) stood at 48.65 trillion yuan, equivalent to 36.4 meter within total assets. % scale financial services business and interbank rate of expansion during this period of credit expansion rate in the table than four trillion times higher bank balances of financial products from 3.2 trillion yuan in early 2011, soared to 10.2 trillion yuan at the end of 2013 a compound annual growth rate of 33.6% .16 listed banks interbank assets (including investments accounts receivable) from 7.31 trillion yuan at the beginning of 2011, increased to 13.74 trillion yuan at the end of 2013, an increase of 88.1%, with an average annual compound growth rate of 23.4%, higher than the growth rate of the total assets of 9.2 percentage points over the same period and in 2008 - similar to credit within the 2010 Great Leap Forward chronology, the rapid expansion of the balance sheet, the anchor is still in real estate and government financing platform, the bank aid sheet-sheet and even the service channel to the real estate industry and local government financing platform project provides a lot of financial support.
A decade of prosperity rational reflection
Property rights reform and divestiture, it is the original power of commercial banks this decade of rapid growth. Since 2000, the government 'scraped the bone healing', has three stripping bad assets of commercial banks, the total size of more than 2.6 trillion yuan, so the time is Banking 'technical bankruptcy' edge finally Shuaixia heavy burden, so for the next low bad, high growth from the ashes of the foundation. In addition, since 2003 the stocks were listed, dramatically changed the system of gene commercial banks. commercial banks by introducing strategic investors and external constraint mechanism to solve the information opaque and operational objectives Alienation, prompting commercial banks to get rid of administrative control, a real market players. Since then, the modern corporate governance within banks take root, governance optimize the structure of the full release of the growth momentum in the banking sector.
GDP growth in the dividend for the prosperity and development of the economic cycle ten commercial banks provide an objective basis for 2003 - China's nominal GDP 2013 年 China's economic development is the golden opportunity, during the annual growth rate up to 16.8%, the actual growth rate there are 10.1%. Within ten years China's GDP has surpassed Italy, Britain, France, Germany, Japan, the world's second largest economy. China's continued rapid economic growth in the total for the banking industry sustained and rapid development of a vast space. On the one hand, the rise in the economic cycle, credit demand relatively strong commercial banks have chosen to 'follow the tactics,' the funds to invest in related industries, with prosperity. On the other hand, within the economic upturn compared with the financial position Well, the bank non-performing assets ratio fell more obvious.
Real estate long-term prosperity for the rapid development of commercial banks to provide a broad market space. Investment is a powerful engine of economic growth in China over the past decade, the 2009 4 trillion investment period, the contribution of investment to economic growth over 90%, while real estate investment It has been a major contributor.
Under China's unique 'land finance' development path, real estate sales share of GDP in 2003 from 5.6 per cent in line all the way to 2007's 11.2 percent, a full five years to double, as of 2013, accounting for Further break of 13.8%, real estate is becoming the biggest pillar of China's economy which, the biggest beneficiaries not only the government and developers, as well as commercial banks - government to make the land transfer, the bank earned spreads, real estate financial leverage earn From real estate investment funding, the 2003 - 2009 period, loans accounted for within the table is about 20% -25%, after the 2010 real estate loans window guidance, poor access to the table, this figure dropped to 15 percent range -20%, but commercial banks innovation finance, interbank business, through tables, exemplar of the outer channel to continue to give real estate developers and local financing platform for credit.
Interest rate controls, interest rate lock policy environment, China's banking sector is able to appear 'golden years' of the dividend policy. Decade China has always strictly regulated interest rates, savings and loan spreads stabilized at 3 percentage points. In the economic boom period inside, the bank only needs to follow the development of the official lending rate loans will be able to obtain significant amount of money. Once upon a time, domestic banks have made strategic transformation goals, but the face of interest rates coupled with the strict supervision of licensed business policy environment, bigger the size of the temptation to do so much faster profit growth, prompting the customer base of commercial banks to large-scale, high investment in fixed assets, capital throughput of industry and business focus, commercial banks lack intrinsic motivation product innovation and customer expansion, Business model is highly dependent on spreads, reflected in the income statement Net interest income is the result of abnormally high proportion of non-interest income is too low. Before 2008 the income share of the banking sector as a whole substantially below 16% until 2009 In Kankan exceeded 20% level, which is in stark contrast with the more general case of 40% of international banks.
High savings rate and indirect financing of the financial system, but also for the development of commercial banks to provide structural support.
High savings rate is an important factor in the rapid growth of the size of bank assets, China's national savings rate from the 1970s has been in the world, in 2003 - over 2013 years, the level of household savings rate hovers around 50%, long-term rankings three in the world, while the global average was only 19.7% of savings (2005, IMF [microblogging] statistics). massive savings settle down in the national balance sheet, and the final conversion to invest. However, from savings to convert the investment process, due to the indirect financing of, and market players and excessive concentration of indirect financing to banks, thus financing needs of businesses and residents are concentrated to bank credit. continuous ultra-high savings rate, as banks the inexhaustible source of huge liabilities.
The old model will inevitably end
Financial economic decisions. Today, the development environment facing the banking sector is in severe and profound changes during the past 'development dividend' has been transformed into 'development debt,' the traditional model has extensive radical unsustainable.
First, increased competition, increased risk making the 'follow the crowd' homogenization of the business model unsustainable. Western commercial banks have formed a diversified, differentiated banking ecosystem, both as HSBC, Citigroup and other integrated, international into the characteristics of a universal bank, but also as Wells Fargo, Bank of New York Mellon and other small businesses, asset custody featuring specialized banks. In contrast, China's commercial banks showed a high degree of homogeneity characteristics, banks rely mainly on competition the price war, the scale warfare 'conventional weapons' to 'close combat', which is an important performance at low pressure market environment extensive operation in the market incremental expansion slowed, escalating customer demand, inventory and credit risks increasingly fierce competition Under increasingly grim situation, transformation is imminent.
Second, excess capacity, industrial restructuring so that the traditional industry-oriented business model unsustainable government platform, manufacturing and real estate industry due to a strong endorsement and mortgage capability is a natural clients of commercial banks in the past decade years, based on the government's implicit endorsement of a large number of commercial banks credit funds to invest in related fields, and now, as the economy continued downward, overcapacity and government tax reform, these industry usher inflection point, declining profit margins, cash flow pressures Systemic risks may be exposed at any time. In such a situation of risk to government financing platforms, traditional manufacturing, and real estate-based, risk factor, consumption of heavy capital assets will inevitably unsustainable credit model.
Third, interest rate liberalization, financial disintermediation make to deposit and loan spreads based business profit model unsustainable. China's interest rate market has entered an end. Historical experience shows that both the United States, Japan and other developed countries, or Brazil, Chile and other developing countries, the interest rate market after the completion of market concentration increased significantly, generally suffer a greater impact on small banks, bankruptcy, reorganization and acquisition after another. China is also likely to exhibit the same trend, small banks will further intensify competition. More serious is that the interest rate market over a period of time to complete the initial deposit rate will run in the high range, superimposition of interbank deposits, financial technology and the Internet has brought financial savings trend move will further enhance the bank's cost of debt.
Old Bank Development under normal economic and financial logic and the 'new normal' departure from the environment, so that Chinese commercial banks ushered in the industry turning point of differentiation. 2014 net profit growth of 16 listed banks slowed 4.1 percentage points, Since then we entered the era of single-digit growth in the single-year increase in the amount of non-performing loans over the past three years to increase the sum of non-performing loan ratio rose 0.25 percentage points over the end of 2013, reaching a high of 1.25%. 2015 is not optimistic the situation more : From six months of data, the five lines of the net profit level currently only about 1 percent, eight joint-stock banks, four banks have slid less than 2% -5% level, overall growth of only 2.4 percent of listed banks, Bank of China industry is and will continue to accept the severe test of the economic cycle.
Transformation and upgrading of strategic thinking
Bank of China to enter the 30 years No change in the situation. Stand on this crucial historical node, as the economic and financial situation of the banking sector highly resonant, must abandon the past, the traditional business philosophy, management style, build competitive differentiation, square to ensure sustainable development.
First, commercial banks firmly establish a correct faith, adhere steady development. History of Chinese and foreign commercial banks repeatedly proven, sound management is the core logic of the commercial bank, the bank as a business venture of special business, impetuous, blind, a coax and short-term behavior, will eventually lead to consequences. For a long time, China's commercial banks in the economic environment of rising prosperity, did not experience a complete economic cycle, so the profit target and risk costs at different times of the issue relative lack of deep dislocation Understanding the past two years the commercial banks net real income 'cliff-style fall' is actually really reflect the risk-adjusted.
Recalling the Chinese economy experienced a short period of reform and opening up 30 years later, in 2014 real GDP is already 28 times in 1978, when I look back, China has become the world's second largest economy, but the average annual compound growth of GDP and less than 10 percent of China's commercial banks if they can maintain the level of growth of about 7%, 30 years after the volume will be eight times today, the world's 1000 largest banks ranking Chinese banks will rise to unprecedented heights - this is the steady development superposition index accumulated effect of time.
However, the 'history lesson to people is that people never accept the lessons of history,' Looking at the world financial history, really be able to line banking stability Zhiyuan very few, most of them sink like a stone in the financial tide commercial banks to pursue a century Foundation, sound is the basic way to operate, but also the transformation and upgrading of basic follow. With the steady development of rational regression, upgrade to truly hoof disease and steady step, dauntless and resourceful.
Effective risk control precisely the line between life and steady development of the bank. Risk management techniques, systems, culture is the cornerstone of commercial banks, commercial banks must have a capital defense risk, but also with a good risk control tools and instruments. As banks diversified, integrated management degree of improvement, especially to enhance the proportion of interbank business, asset quality and efficiency of economic fluctuations and operating environment has become increasingly sensitive to market risk, interest rate risk, currency risk are rising, different risks between increasingly easy cross-infection. In this regard, commercial banks should establish internal co-ordination tables, table-sheet outside and comprehensive risk management system, focusing on team and technology to build a 'risk' lines, according to the changes in economic and industry situation dynamically adjust the balance of risks and the market, moderate risk defense front, to explore large data risk-based Internet / Things monitoring new means of risk in each business operation mechanism among banks have a clearer understanding and more accurate grasp reduce risk Key costs.
Second, true to the strategic management of the road, pushing commercial banks Transformative from Taylor's scientific management, to people-oriented organization and management, to strategic management at this stage, this is a big trend in the evolution of business logic and management development. In recent years, With the domestic financial market reforms to push, the importance of strategic management in the management of commercial banks in the increasingly prominent banks began to strengthen industry trends and economic and financial situation of the judgments, and on this basis, and constantly adjust the strategic direction. In particular, It is noteworthy that in joint-stock banks, represented by the commercial banks to differentiate more and more significant strategic transformation effect, made a good demonstration effect. Strengthen strategic management in the new situation, has gradually become the industry consensus, the strategic management of commercial banks also We are gradually scientific, standardized operation stage.
With the old normal development under bank switching logic, the commercial banks of the importance of strategic management, system architecture and implementation measures should have a new understanding of strategic management will be the key in the new normal commercial banks to create differentiated competitive advantage lies connotation of strategic management should be more abundant than in the past, more substantial. Commercial banks should strengthen strategic organizations, through sustained, dynamic, closed-loop strategic management, to ensure the effective allocation of resources, the formation of strategic forces, security strategy development of scientific, forward-looking sex, concentrated and targeted implementation of the strategy, continuity, consistency.
Third, recognize banking strategic convergence trend, relying on sophisticated management Win Since 2013, the banking sector into the general intensive period, the banks are in the development of a new development strategy, we found that these strategies can be used basically international, intensive, integrated financial, Internet banking, small micro-finance, business intelligence, and so on to summarize. In another strategic banking high degree of convergence of the situation, strengthen strategic execution, improve fine management level, has become a strategic success key. In this sense, the strategic implementation of the strategy is more important than determining only enhance the management level of capital costs, processes, risks, pricing, customers, manpower and other aspects of the transition in order to succeed.
The fact is the case. In recent years, domestic commercial banks are actually in accordance with foreign experience to develop the retail business, small and micro business and intermediary business. But even if a business is focused on the performance of the line and the line between different transition Effects vary, some banks found that a lot of resources of so-called strategic business, in practice, to create value far better than expected. Transformation is not a simple change of business development, and its essence is a management behind the revolution.
'World affairs, will be in fine.' For the commercial banks, with industry and cross-industry competition is becoming increasingly fierce, behind business development, value management is more prominent. Meticulous management is beyond competition, beyond the self's needs, it is strengthening strategy implementation and strategic management and control needs, but also the inevitable choice to seek bank Everlasting.
Commercial banks should put fine management as part of the strategy, the critical point of execution, management processes, are taken into account as a strategic category, the introduction of effective strategic management tool, advocating instrumental rationality, enabling organizations to snap accurate, efficient, coordinated and continuous operation, thereby improving management efficiency. It is certain that the next decade will enter the commercial bank management era of winning, management can also create value.
Fourth, learning from history, choose a new business direction changes in the situation of scientific rationality. In the past upswing China's rapid economic development, many industry has entered a growth period of carnival, at this stage, chances are universal. Strategic Choice Bank only followed by the mainstream industry, mainstream customers, will be able to share the prosperity, if not to follow the strategy, in order to upgrade and deliberate, is bound to be left behind in the last decade of the homogenization of competition, it is that time of rational choice, this by the logic of the old normal development under the decision.
Under the new normal, chances are structural. China transition from rapid growth to the rapid growth, although growth has slowed but is still located in the world, China's commercial banks still have a bright future. We are faced with 'Dongsheng West fall 'of the world economy and political structure, we also jointly usher in' the public business, the highly innovative 'and' along the way ',' Yangtze River economic belt ',' Beijing, Tianjin and integration 'and other national strategies, but, at the national grand narrative Under the background, we also bid farewell to the universality of growth opportunities, the risk will go hand in hand during the economic development of the past two years has fully proved this point.
Although, under the interest rate market, financial disintermediation, the weight of the three big mountains of Internet financial intermediary business transformation banks have (asset) management, investment banking, financial markets and other asset-light of the wealth, but the commercial banks need more from their own natural resources, historical heritage, risk preferences, cultural gene departure, establish their own business direction and business strategy, business intelligence, commercial banks in the true sense of the times has come. If you again select the homogenization of competition, not only It will lead to greater risk, and this will be a historic development opportunity missed.
Looking back a decade to when the road, in China's rapid economic growth in the background, the commercial banks rely on the homogenization of the business model has achieved rapid development. The next decade, the shift in the growth rate, industry restructuring and market-oriented reform of large background, commercial banks must continuously improve strategic capability, innovation and development capability, and ultimately the formation of differentiated competitive edge. However, the difference is the development of a long road, a generation banking firm confidence in the development of people, maintain strategic anyone, not for temporary market impetuous move, a deep insight into the laws of logic and internal operation and management of commercial banks, and find their own path of development, in order to open a new era of Chinese commercial banks.
The author is president of Ping An Bank
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