Latest News:  
Beijing   Light to moderate rain/Light rain    13 / 8 ℃  City Forecast

English>>China Business

'Big Five' on a roll, but outlook blunted by rate deregulation (2)

By Hu Xiaocen (Shanghai Daily)

09:59, November 19, 2012

Pricing power

The net interest margin at Bank of China rose 0.02 percentage point to 2.12 percent at the end of September. Agriculture Bank's margin dipped 0.03 percentage point to 2.82 percent, but the bank still has the highest margin among the five lenders due to its pricing power in rural areas, according to Jiang Chaoliang, chairman of AgBank.

"Currently 40 percent of our deposits and over 30 percent of our loans come from rural business, which keeps our net interest income at a more favorable level than our peers," Jiang told the media last week during the 18th National Congress of the Communist Party of China. "We have benefited from our strength in rural areas."

The net interest margin at the Bank of Communications slipped to 2.60 percent in the third quarter from 2.61 percent in the second. However, it could have been worse.

"Thanks to our thriving credit card business, the net interest margin did not contract much," Qian Wenhui, vice president of the bank, said at a conference last month. "Business in the middle and western regions and small business loans were promising, improving our credit structure and stabilizing our net interest margin. Price management is the key."

In addition to deregulation of interest rates, the big lenders also face fiercer competition from other financial institutions that may force them to provide greater discounts to a bigger group of customers, said S&P.

At the end of 2011, banks priced only 7 percent of new loans below the benchmark rate, but the proportion is expected to rise to 20 percent by the end of 2013, according to the agency.

For the biggest lenders, aggressive expansion since 2008 was fueled by heavy national investment. That strategy is undergoing changes as the central government is now placing grater emphasis on what it calls "quality growth" over just fast expansion.

【1】 【2】 【3】

We recommend:

A Decade of Fastest Development

Eastern Boom Lightens Western Gloom

Chinese firms 'potential Trojan horses'? slows

AVIC unveils new aircraft engines

Oct. data released, inflation slows

13th Int'l Automobile Industry Exhibition

China Int'l Industry Fair opens in Shanghai

Caofeidian coal wharf put into use

Galaxy Soho building in Beijing


Related Reading

Leave your comment0 comments

  1. Name


Selections for you

  1. China's stealth fighter concept model

  2. PLA Macao Garrison finishes 13th rotation

  3. Unforgettable moments in Nov. (III)

  4. Flight test of unmanned aircrafts conducted

  5. First inter-blood-type liver transplant in China

  6. Harbin Autumn Automobile Exhibition

  7. Embroider best wishes on insoles in Shanxi

  8. China's rich people will reach to 280 million

Most Popular


  1. Commentary: Hot money needs cooling
  2. Smart solutions for better city, better life
  3. China remains an 'engine' in global economy
  4. M&A of listed companies gaining steam
  5. Is 'culture' inferior to 'commercialization'?
  6. Chinese liquor makers "sober up" over bans
  7. Strength of Chinese culture lies in understanding
  8. Securing China's e-commerce growth
  9. Hammered ore prices threaten Chinese iron miners
  10. CNN Beijing chief: China's challenges, opportunities

What’s happening in China

Landmark building should respect the public's feeling

  1. Herders, sheep flock move to winter pasture
  2. First inter-blood-type liver transplant in China
  3. HIV patient to sue hospital over cancer op refusal
  4. Test in intelligent vehicle for food detection
  5. Smart card, dumb refund rules