The Environment Is Complex: China'S Banking Industry Is Facing An Unprecedented Crisis.

Since March, 16 Chinese banks have been downgraded by international rating agencies, and 1 banks have been downgraded.

What is more concerned is that at the end of 6 this year, S & P lowered the bank rating of Nanjing. The Nanjing bank asked the S & P to revoke its rating. More media reports said that because of the larger differences between the two sides, the Nanjing bank decided to terminate cooperation with the S & P.

The way out is to readjust the structure and adapt to the requirements of science and technology financial reform with the core of Internet, big data and intelligence, and increase the driving force of development with innovation, so as to maintain a stable rating credit level.

In this regard, the Chinese style of defense, Chinese style disdain, and unsurprisingly staged.

It is considered that downgrading the outlook to negative does not affect the normal operation of the banking industry, and doubts about the international rating agencies' knowledge and understanding of China's economic, financial and banking sectors, and claims to be the views of the international rating agencies themselves.

Of course, Chinese banks that were rated down also responded.

Bank of communications is most rational. It believes that although the growth of non-performing loans in the banking system is fast, the bad loan rate of the industry is still far below 2%, and the loan to credit ratio of more than 3% has laid a good foundation for banks to cope with potential risks.

According to this calculation, even if the non-performing loan ratio of the banking system rises to 4%-5% level, China's banking industry also has sufficient financial resources to deal with it.

And Nanjing

It even asked the international rating agencies to withdraw their ratings and threaten them with no cooperation.

As a result, S & P withdrew the above ratings.

From the author's point of view, it is necessary for the international rating agencies to reduce the ratings of Chinese banks objectively and rationally.

Moodie and S & P are the three most authoritative rating agencies in the world. The authority of their ratings is widely accepted by international organizations.

There is no doubt about authority.

China's banking sector is indeed experiencing an unprecedented crisis.

Three indicators can peep at the general.

First, the ability to absorb funds has declined considerably.

At present, the ability to absorb low-cost funds is basically lost.

At a macro level, global interest rates are low, and interest rates in China are at the bottom of history. Interest rates are not attractive and competitive to customers.

Traditional banks have basically lost the means of absorbing funds.

At the same time, the rise of private finance and the proportion of direct financing increased.

Disintermediation and rapid advance are all scramble for the bank's rice bowl.

Moreover, banks are forcing the introduction of financial products and other disguised interest rates to absorb funds.

This has greatly increased the financing cost of the banking industry, and is undoubtedly exacerbating the decline in profits.

Two is the profit cliff type, the thrilling decline.

The banking industry has entered an "anxious moment".

In recent years, the profit growth rate of banks has dropped sharply from 36.34% in 2011 to 2.43% in 2015. Although there has been a rebound in the 1 quarter of this year, the contingency factors of quarterly adjustment are not excluded.

From more than 30% high growth to near zero growth, the banking industry took only four years. This is a thrilling change.

Three is the rapid rise of non-performing loans.

Over the past two years, the number of non-performing loans in banking industry has soared. The bad rate has increased from 1% of three years ago to 1.68% last year.

In the first quarter of this year, the bad rate of the banking industry rose to 1.75%, and the ratio of loans to loans increased to 4.01%, and the provision coverage dropped to 175.03%.

The proportion of overseas institutions, including IMF, is likely to be higher or even more than ten percent.

What is more serious is that as the overcapacity increases and the non-performing loans hidden by new and old ones are gradually exposed, the pressure of non-performing loans in the banking sector is still rising.

The rapid rise of non-performing loans is eroding the capital of banks.

At the same time, the drop in profits has greatly weakened the ability to replenish capital.

Taking profits as an example, the four year period has dropped from an annual growth of 30% to nearly zero today. Under such severe challenges and operating conditions, the banking rating has remained at a level of four years ago. Therefore, we must rationally consider the downgrading of rating agencies.