Chinese banks face challenge by private companies’ entry into financial services
Beijing’s softer stance towards bank license issuance highlights willingness to restructure domestic financial industry. October 29, 2013 | Magessan RajIf recent developments in China are of any indication, private businesses could very well end up being the bearers of change in the domestic banking industry, as Beijing's bid to shake up the sluggish financial industry saw China Banking Regulatory Commission (CBRC) inviting companies from across the various private industries to apply for banking licenses. With Beijing seemingly keen to create more investment opportunities for the private sector following premier Li Keqiang's speech in June 2013 encouraging private capital to be invested in the restructuring of financial institutions, his call has been met with resounding interest by various parties. Dozens of private companies, including e-commerce behemoths Tencent and Alibaba Group and even home appliance retail giants Suning and Gree, have already applied for a license or are in the process of applying for one. The incredible response from China’s private sector comes as little surprise, and can be largely attributed to a desire to tap the fat lending margins as a result of controlled interest rates. China Enterprise Confederation found that of the 500 largest domestic companies in the country, China’s top five banks accounted for 35% of the total profits, underlining the banking industry's huge profit margins. Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Capital & Strategic Issues, Private Banking, Retail Banking, Risk and RegulationCapital & Strategic Issues,Private Banking,retail,Risk and Regulation, Capital & Strategic Issues,Private Banking,Retail Banking,Risk and Regulation, Keywords:CBRC, Tencent, Alibaba, Suning, Gree, China Minsheng Bank, PayPal, Square, Amazon, Google CBRC, Tencent, Alibaba, Suning, Gree, China Minsheng Bank, PayPal, Square, Amazon, Google
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