Ye Tan: Four Major Worries Of Financial Institutions From The Four Annual Reports

Banks are still harvesting.

From the annual report, China's major banks achieved good results last year, and profits rose, while the rate of bad assets remained at a low level.

Overall, large banks

The first worry is that interest income is still the mainstream of the bank's income, and there is no fundamental change in the way to win the policy by eating and expanding the scale. The net interest income of ICBC is 303 billion 749 million yuan, an increase of 23.6%; the net interest income of Construction Bank is 251 billion 500 million yuan, an increase of 18.70%; the bank's interest net income is 193 billion 962 million yuan, an increase of 22.08%; and the interest net income of Agricultural Bank of China is 242 billion 152 million yuan, an increase of 33.31%.

Banks have benefited from the expansion of the deposit and loan gap. The central bank has tightened the money without raising interest rates, so that asset rich banks have the right to loan pricing, and loan prices generally rise.

If we increase the 50 base points, ICBC will reduce interest income by 700 million, accounting for 0.19% of last year's ICBC's revenue, which is within the acceptable range.

The second worry is that the growth of intermediary business may cost the real enterprises.

Although the profits of major banks are rising at the same time, their prospects are different. Considering that the financial industry in China is at a critical moment in the pition from indirect financing to direct financing, the intermediary business income and the specific composition and cost increase become the main consideration.

The four biggest line is the biggest and most profitable one.

Big banks can get profits under the traditional profit and loss mode of loan to deposit and loan. In the pformation of financial institutions, they can get new profits from small business bank positions such as intermediary business.

According to reports, bankers have confirmed that the current situation of branches of banks is that they convert part of their interest income to "consultants and advisory fees".

These superficial consultancy fees are actually the apportionment of banks' mastery of loan pricing power. In essence, they are more like the continuation of traditional businesses.

The third worry is the rise in non staff costs.

Last year, the war of attracting money and storage increased, and the cost of bank storage increased sharply. Especially at the end of the quarter, the news that the deposit of 100 million yuan returned to 200 thousand a day was endless.

From the published annual reports of banks, the increase in non staff costs in the medium term indicates that banks are rapidly increasing in order to absorb the cost. This risk will be fully exposed in 2011.

Fourth worries, each underestimated the risk of bad debts of the local investment and financing platform and overconfidence in risk control after refinancing. According to the CBRC data, as of the end of 2010, the liquidity ratio of banking financial institutions was 43.7%, down 2.1 percentage points from the same period last year.

The ratio of deposit and loan is 69.4%, which is 0.1 percentage points lower than that of the beginning of the year.

The capital adequacy ratio of all banks is still under pressure. Therefore, in the context of such beautiful annual reports, the dividend payout rate declines simultaneously. Both CCB and BOC are going to reduce the dividend payout rate in 2010 in order to enrich their capital.

Banks are still earning dividends in scale expansion. If we do not accelerate the marketization and homogenization competition will continue for several years, the pressure and cost of banks will rise in a large scale.

It is hoped that 2011 will be the beginning of heterogeneous expansion.