Accelerating the Development of Intermediary Business Has Become a Crucial Issue for China's Banking Industry
DUBLIN, Ireland--(Business Wire)--
Research and Markets
(http://www.researchandmarkets.com/reports/c94032) has announced the
addition of "Intermediary Business Report of China Banking Industry,
2007-2008" to their offering.
With the continuous buildup in the revenue proportion of the
intermediary business to bank's total, developing intermediary
business has become the priority of the banking industry. At present,
the ratio of non-interest revenue to the bank's total in major
countries is around 20% with some individual banks even as high as
70%. Thus the non-interest revenue has become an extremely important
factor in deciding the total revenue of a bank. The publisher's
research shows that the average ratio of non-interest revenue to the
total revenue of a bank in the United States of America and Canada is
45%, in European countries is 44% and in Australia is 28%. The more
developed a country's economy is, the higher the ratio of non-interest
revenue will be in the country.
In China, every listed bank had a big growth in business
performance in the fist half of 2007. The rapid growth in the revenue
of intermediary business has become another reason for the surge in
profit of a bank, in addition to the conventional interest revenue.
Take service charge and commission, the most typical revenue in the
intermediary business. For instance, in the first half of 2007, the
combined income from service charges and commission of the Bank of
Communications reached RMB3.63 billion, 2.24 times the figure in the
same period of 2006. The China Merchants Bank stood at RMB3.01
billion, 2.28 times the figure in the first half of 2006 and the China
Citic Bank arrived at RMB715 million, up 77% year on year.
According to statistics, half of intermediary business revenue of
the listed banks was related to fund commission service in the first
half of 2007. The unusual surge in service charges and commission has
led to a big rise in ratio of the intermediary business revenue to the
total. At present, the China Merchants Bank's proportion of the
intermediary business revenue to the total in all banks in China is
the highest, reaching 16%, 1.7 percentage points higher against the
end of 2006, followed by 11.34% from the Bank of Communications, 9.0%
from China Citic Bank, 9.0% from Shenzhen Development Bank, and 6.5%
from Industrial Bank. More or less all of them experienced a growth.
The unusual surge of the handling charge and the commission leads
to a big increase of the intermediary business revenue ratio.
Currently, the China Merchants Bank has the highest intermediary
business ratio at 16%, 1.7 percentage points higher than the end of
the first half of year. The second one is Bank of Communications with
the ratio of 11.34%, CITIC Industrial Bank 9.09%, Shenzhen Development
Bank 9% and Industrial Bank 6.5%. All of them got an increase more or
less.
China's top five banks, namely the Industrial and Commercial Bank
of China, Agricultural Bank of China, Bank of China, China
Construction Bank and Bank of Communications, the combined revenue of
intermediary business amounted to 91.3% of China's top 12 banks' total
at the end of 2006.
Although the intermediary business in China has developed very
fast in recent years, there still exists a big gap between China and
developed countries. On one hand, the proportion of intermediary
business revenue to the total in most of the commercial banks in China
is about 10%, much lower than the U.S. and Europe, and even compared
to Asian countries like Japan and Singapore, the proportion is still
lower. On the other hand, the varieties of intermediary business in
China's commercial banks are very limited, focused only on the
conventional products, like settlement, agiotage, bill payment
service, credit card, letter of credit and bill of draft and so on,
and the high-tech and high value-added intermediary business regarding
the consulting service, investment and financing and derivative
trading is much needed.
Therefore, accelerating the development of intermediary business
has become a crucial issue for China's banking industry. The Chinese
should promote the establishment of an automatic clearing system in
the same city to automatize accounts process and they should also make
more efforts to develop private banking business and asset
securitization so as to lay a solid foundation for future development.
CONTENT:
1 Overview of Intermediary Business
2 Status Quo of Intermediary Business of China Banking Industry
3 Development of Intermediary Business of Foreign Banks
4 Analysis of Intermediary Business of Key Chinese Banks
5 Trend of Intermediary Business Development of China Banking
Industry
**CHARTS AND TABLES ALSO INCLUDED**
For more information visit
http://www.researchandmarkets.com/reports/c94032
Research and Markets
Laura Wood, Senior Manager
Fax: +353 1 4100 980
press@researchandmarkets.com
Copyright Business Wire 2008
