China Banking Association Releases List of Top 100 Chinese Lenders

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The peak body for the Chinese banking sector has released its latest list of China’s top 100 lenders.

On 26 February the China Banking Association released its “Commercial Bank Stable Growth Capability ‘Gyroscope’ Assessment Blue Paper” (商业银行稳健发展能力“陀螺”(GYROSCOPE)评价蓝皮书), outlining the Association’s list of the top 100 members of the Chinese banking sector for 2018.

The 2018 list of China’s top 100 commercial banks included the six big state-owned banks, 12 nationwide joint-stock commercial banks, 63 municipal commercial banks and 19 rural commercial banks.

The top ten banks in terms of net core tier-1 capital were Industrial and Commercial Bank of China, China Construction Bank, Bank of China, Agricultural Bank of China, Bank of Communications, China Merchants Bank, Industrial Bank Co., Shanghai Pudong Development Bank, the Postal Savings Bank of China and China Minsheng Bank.

The report defines net core tier 1 capital as core tier 1 capital minus a range of deduction items including common stock, capital reserves and retained earnings.

The top three municipal commercial banks according to the 2018 list were Bank of Beijing, Bank of Shanghai and Bank of Jiangsu, while the top three rural commercial banks were Chongqing Rural Commercial Bank, Shanghai Rural Commercial Bank and Guangzhou Rural Commercial Bank.

The Blue Paper further points out that China’s banking sector has seen a sharp decline in capital growth. As of the end of 2017 the net core tier 1 capital of banks on the list was 12.460169 trillion yuan, for YoY growth of 10.40%, and a deceleration of 1.26 percentage points compared to 2016.

The declining rate of capital growth reflects increasing pressure on the Chinese economy, as well as the overall tepid state of China’s capital markets that has left banks with comparatively limited room to boost their core tier 1 capital via convertible bonds, IPO’s or new stock issues.

The Blue Paper also highlights a divergence between asset growth and growth in net profits.

As of the end of 2017 the 100 banks on the list saw total net profits of 1.689957 trillion yuan, for a YoY rise to 5.3%, while total assets were 187.45 trillion yuan, for YoY growth of 7.4%, and a gap of 2.1 percentage points.

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