Annual Fintech Investment of Chinese Banks Approaches 100 Billion Yuan, Big State-owned Lenders Account for 60%

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A new report from the peak body for the Chinese banking sector points to a sharp rise in fintech investment by commercial lenders as a percentage of revenues.

The China Banking Association has just released the 2018 results for its Gyroscope (陀螺) assessment system, which evaluates actual investment by Chinese commercial banks in the fintech sector.

According to the report fintech investment as a share of revenues has broadly risen from around 1% to 2%, and even beyond 3% for certain municipal banks.

CBA’s analysis estimates that annual fintech investment by the Chinese banking sector as a whole currently stands at nearly 100 billion yuan.

CBA also providing a ranking of China’s national commercial banks in terms of their “smart conversion capability:”

  1. Ping An Bank
  2. China Everbright Bank
  3. China Merchants Bank
  4. China Construction Bank
  5. Agricultural Bank of China
  6. Industrial Bank Co.
  7. China Guangfa Bank
  8. China Zheshang Bank
  9. Bank of China
  10. Bank of Communications

Fintech investment by the top five placeholders accounts for over at least 2% of total revenues, and stands at 2.98% and 2.71% for Ping An Bank and China Everbright Bank respectively, for investment sums of approximately 3.1 billion yuan and 2.5 billion yuan based on 2017 earnings.

China Merchant Bank’s annual fintech investment sum stands at 4.8 billion yuan, while for Industrial Bank Co. the figure is 2.2 billion yuan.

Fintech investment by China Construction Bank, Agricultural Bank of China and Bank of China accounted for 2.17%, 2.21% and 2.11% of total revenues, for investment sums of 13.48 billion yuan, 12 billion yuan and 10.2 billion yuan respectively.

Fintech investment by Bank of Communications accounted for 1.97% of revenues, or around 3.9 billion yuan based on 2017 earnings.

Industrial and Commercial Bank of China’s annual fintech investments are over 10 billion yuan according to CBA’s estimates, bringing total fintech investment by China’s big six banks in 2018 to nearly 60 billion yuan.

Municipal banks posted a highly diversified performance, with fintech investment by Bank of Dongguan and Bank of Zhengzhou exceeding 3% of total revenues at 3.54% and 3.67% respectively, while the figure for Bank of Jiangsu a mere 0.94%.

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