It seems like the government’s strategy to demonopolize banking is working, however there is still a long way to go for smaller joint-stock commercial banks, which number around a dozen but command only 18.21% of all assets, compared to 41.21% of the Big 5 banks.
The regulator also noted an increase in rural-related and SME lending – the policy-driven sectors grew 13.0% and 17.5% respectively, faster than average credit growth in the country.
However, risks are rising as well. The overall Non-performing Loan (NPL) ratio is up 0.25 percentage points to 1.25%. But the regulator assures us this level of NPL is manageable and reports a healthy level of capital adequacy ratio which is up 0.61 percentage points and currently stays at 10.56%. Also, financials look very strong as profits grew 9.65% to RMB 1.5 trillion.
For more trends beyond financials and what to expect in 2015 please see our new Top 10 China Banking Technology Trends 2015 study.