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Latest Insight

According to PBOC, at the end of 2013 Q1, China’s bankcard consumption transaction volume and value rose rapidly by 44% and 60%, respectively. Interbank transactions made up the majority of total transaction volume and value – accounting for 56% and 77%, respectively. At the end of 2013 Q1, the total circulation of bankcard in China reached 3.6 billion, increasing by 19% year-on-year, with 3.3 billion debit cards and 343 million credit cards. The average bankcard consumption per person increased by 60% to 4900 RMB.

China's Bank card issuance continues to increase

Written by Kapronasia || May 28 2013

Based on data released from the PBOC, bank card issuance in Q1 has increased 4.5% compared to 2012 Q4 to reach a total of 3.69 billion cards issued. Within the issued 3.69 billion cards, the total number of debit cards issued was 3.65 billion and total credit card issuance reached to 0.34 billion. From Q1 2012, the issued bank cards have had a steady growing trend which indicates that bank cards have becoming more and more Important as a payment method in China. Domestically, 10.6 billion bank card transactions happened in Q1 2013, and the total transaction value was 100.27 trillion yuan which increased 23.9% and 19.3% compared to Q1 2012.

 

Chinese Bankcard issuance

According to iResearch, the total transaction value of China’s 3rd party online payment in 2013 Q, for the first time, declined slightly from last quarter’s 1,065 billion to 1,018 billion, -4.4% quarter-on-quarter. After the staggering growth over the last ten years, China’s 3rd party online payment market has entered a more mature stage of development. This dip largely resulted from the increasing commoditized and homogenous products and services – 3rd party players need more innovative products to improve their services and boost their revenue in the future.

Alipay is still the biggest 3rd party player, accounting for 48% market share, followed by China UnionPay with 20% market share.

China Online Payment Transactions by Value 

According to the annual reports released by city commercial banks, a lot of city commercial banks’ net profit growth rates in 2012 have shown a slowing down trend compared to 2011. For example, in 2011, both net profit growth rates of Hankou Bank and Bank of Chengdu were close to 50%, however, both of them shown a dramatic decrease as the end of 2012. Also, the net profit growth of the two listed city commercial banks - Bank of Nanjing and Bank of Ningbo, are showing a significant decline in 2012.

Lower net profit is putting a lot of pressure to Chinese commercial banks in 2013, and the figures implies that city commercial banks have to seek for new business and products to reboot high profit in 2013.

 

 

As the end of 2012, the total number of Chinese online banking registered users reached about 489 million. More specifically, according to the data released from Cebnet, CCB’s online banking customers increased to 119.26 million, jumping by 41% from 2011 to 2012. The number of BOC’s online banking customers has reached to 91.42 million, with a year-on-year growth rate of 66%.

Because of the dramatic increase in the number of online banking users, banks such as ICBC and CCB have launched more innovative personal banking services such as social insurance and wealth management services.

Number of Online banking users in China 

 

 

China's Bankcard Consumer Confidence Keeps rising

Written by Kapronasia || May 17 2013

Recently, China UnionPay (CUP) and Xinhua News Agency jointly released the Xinhua • CUP Bankcard Consumer Confidence Index (BCCI) for March 2013. It shows that the BCCI is currently at 87.20, growing by 1% month-to-month and 0.43% year-on-year. Generally, the more consumption expenditure on non-necessities, the better macroeconomic situation and personal income reflected, and the more optimism consumers hold towards the future economic situation and personal income.

Based on the transaction information of bankcard consumption by urban residents, this BCCI reflects the confidence level of the consumers towards macro-economy by analyzing the changes to the structure of the bankcard consumption expenditure (mainly the change in the proportion of non-necessities to total consumption amount). Chinese government’s further push on domestic consumption will continue to drive the steady growth of BCCI.

 

 

 

Beijing's E-commerce keeps growing

Written by Kapronasia || May 15 2013

According to Beijing’s government, the total transaction value of e-commerce in Beijing, one of biggest cities in China, grew by 45% to 550 billion RMB in 2012. Beijing’s e-commerce market is characterized by its high transaction volume, which has prompted half of China's top 10 e-commerce companies set up headquarters in Beijing in often in one of the two national e-commerce industry zones which attract a great number of small and medium e-commerce firms. Beijing’s government expects that its e-commerce transaction value will grow at 22% CAGR and hit 1 trillion RMB in 2015, which will account for 60% of Beijing’s GDP. 

 

According to the CBRC, China’s commercial banks announced a total net profit of 1.24 trillion RMB in 2012, with the total net profit of the 16 listed banks comprising 1.03 trillion of that total. Among these 16 listed banks, the five major banks ICBC, ABC, BOC, CCB, and BOCom earned 239, 145, 139, 194, and 58 billion RMB respectively in 2012. China Merchants Bank (CMB) made 45.3 billion RMB net profit in 2012, topping other joint-stock banks. Bank of Beijing, as the leading city commercial bank in China, earned 11.7 billion RMB net profit last year. However, the overall net profit growth rate of China’s commercial banks has declined compared to 2011 apparently due to the process of interest marketization which has deceased interest based revenue recently. 

Chinese Banks Net Profit 2013

 

 

 

 

 

Recently, Alipay, China’s largest third-party payment company, released its sound wave payment mobile product, which is the first time that “sound payments” have been commercialized in China. Customers can now pay for goods from the vending machines deployed by Alipay in Beijing’s subway through the sound wave payment.

NPLs in Chinese Banks Trending upwards again

Written by Kapronasia || April 27 2013

According to the China Securities Journal, the quality of credit assets is again appearing as an issue for Chinese banks. The latest annual report shows that the non-performing loan (NPL) balance and non-performing loan (NPL) ratio both increased in 2012, a sharp move from the “double decreasing” in both NPL balance and NPL ratio in the previous years.

The total NPL balance in the 11 listed banks was ¥385.38 billion in 2012 with a YOY growth rate of 8.1% compared to ¥356.6 billion in 2011. China Construction Bank believes the upward trend in NPL is due to the macroeconomic fluctuations in manufacturing, wholesale and retail trade, and real estate.

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