Bank card fees to drop (2)

Many experts and policymakers believe that expanding domestic consumption is the only measure left that can help promote China's economy.

However, Guo Tianyong, director of the Research Center of China Banking at the Central University of Finance and Economics, told the Global Times Monday that as much as he supports the fee-cutting policy, which reduces business costs and is beneficial for consumers, such a policy will bring down income for the banking industry in the short term.

According to statistics complied by Beijing-based Investor Journal on the financial reports of China's 16 listed banks, bank card transaction fees reached 48.3 billion yuan ($7.76 billion) for the first half of 2012, 3.8 percent of the banks' total revenue.

"Therefore, banks need to find other ways to make up for the decrease in fees, like strengthening part­ner­ships with on­line shopping plat­forms to increase card payment volume," said Guo.

According to data released by the central bank in November last year, by the end of October 2012, China had issued a total of 3.4 billion bank cards. Individual bank card consumption during the third quarter of 2012 reached 1,805 yuan per person, up by 24.3 percent year-on-year.

But Liao Qiang, director of financial institution ratings at Standard & Poor's, told the Global Times that he does not think a drop in fee income will have a significant negative influence on banks, since the income does not form a large proportion of revenue.

"We don't think the ratings of Chinese banks would be downgraded," said Liao.

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