Chinese Bankers Survey 2012

This is the fourth annual edition of the Chinese Bankers Survey Report (2012), jointly presented by the China Banking Association (CBA) and PwC.

The survey adopts a detailed, holistic and integrated approach where top executives at head offices and branches of financial institutions in China were surveyed. The Chinese banking environment faced significant pressure in 2012. As result of the global economic downturn, China’s economic growth was on a downward trend; as a result of declining business growth, the banking sector is facing a series of challenges such as a lack in demand for credit, an increase in the level of risks, thinning in profit margins, etc. At the same time, asset-side businesses continue to face strict restrictions from orientation and scale in investments.There was also public pressure on fee income and constraints from the regulator, resulting in pressure on the expansion of banks’ intermediary businesses. More importantly, events such as increasing diversification of social financing as well as promoting interest rate liberalisation, are having a profound impact on the development of China’s banking sector.

Approximately 70% of bankers expect that growth rate of revenue and profit for banks over the next 3 years will be lower than 20%, and expanding the scale of interest-earning assets is the most powerful motivating factor for future profit growth. The bankers are optimistic on future asset quality, and more than half expected non-performing loans rate of banks over the next 3 years to remain under 1%. 80 % of bankers believe that the capital adequacy ratio of banks will reach more than 10% by the end of 2012. 64.6% of bankers believe that provision coverage ratio of banks will reach 150% by the end of 2012.

Find out more by downloading the executive summary.