中国银行业的暴利

China's real economy experienced difficulties last year, slowing its growth rate after impacts of the international financial crisis. But China's banking industry has maintained strong growth momentum, with a new high of 40 to 50% growth in profit.
 
Financial experts believe that the colossal profits Chinese banks have made come from the rate margin. For instance, at this moment, the one year deposit rate of domestic banks is 3.5%, while the one year rate on loans is 6.6%, with a spread of more than 3%.

Liang Lijun, Associate Professor of Guangdong University of Foreign Studies, says the rate margin is the traditional way for banks to make money, but it is usually about 1% in mature western banking systems.

"The rate margin in China is set by the People's Bank of China, which is said to be about 3%. But while the deposit rate is fixed by the central bank, banks can raise the rate on loans. If the loan rate doubles, the spread will be 10%."

The state-owned banks bear the responsibility of supporting the middle and small sized companies as well as micro enterprises. But the fact is, these companies either can't borrow money from the banks, or they can't afford the excessively high loan rate.

Depositors, on the other hand, are also victims. With the CPI growth rate of 5.4% last year, the one year deposit rate was only 3.5%. That is to say, banks are taking the hard earned money of common people as a result of the negative interest rates. Song Ruliang, professor with China Communist Party College appeals to domestic banks to make some changes.

"Depositors are stake holders. The more they save, they more they lose. I think the commercial banks should have the conscience to find a way to reduce the financial loss of their depositors."

Besides huge margins, commission charges under various names are another major source of bank profits.

Commercial banks had only about 3 hundred charge items in 2003, but the number has leaped to over 3 thousand now, ten fold within seven years. According to the reports of 12 listed commercial banks, the commission charges of the first six months of 2011 made more than two hundred billion yuan, constituting half of their total net income.

Experts point out that colossal profits of commercial banks are not good for the real economy. The current banking system makes commercial banks the only winners. A healthy and fair banking pattern needs to be established.

For CRI, I'm Zhang Shuangfeng.