中国银行业 : 机遇与挑战 China Banking Sector:Chances and Challenges

1. 中国银行业:机遇与挑战China Banking Sector:Chances and Challenges

2. Contents • China Banking Sector’s Profile • China Banking Sector’s Reform& Openning-up • The Supervisory practice of the Chinese Banking Industry • China’s new regulation on Capital Requirement • Challenges for Chinese banks • G-SIFI Supervision Practice • Conclusion 2

3. Banking Institutions Supervised by the CBRC中国银行业框架体系 2012-12-31 Ⅰ Ⅱ Ⅲ 3

4. China’s banking sector remains safe and sound银行业基本情况Maintaining resilience to risks By theend of June 2012, the total banking assets reached RMB 144.25 trillion, up by 13.78% .资产规模 Average ROA of 1.38%,average ROC of 21.19% and the pfofit of 753.1 Billion after tax 平均资本回报率21.19%，税后利润7531亿； The5 big banks’ asset amount to 63.83 trillion RMB accunt for 44.25%of total banking sector大型银行 Capital Adequacy Ratio 12.24% Based on ranking of the core asset in The Banker in 2012,there are 104 Chinese banks on the top 1000 banks worldwide 2012年英国《银行家》杂志：基于核心资本排名，中国有104家银行进入全球1000家大银行之列。 4

5. The NPL balance and ratio continue to decline不良贷款情况 6.16% 1268 0.96% 539.5 End of 2007 June of 2012 NPL balance（RMB billion） NPL ratio 5

6. Provisioning continues to increase拨备情况 6

7. Banking Sector’s Reform Corporate Governance Diversify the Equity Foreign Strategic Investor Risk Management Various market participants 7

8. Banking Sector’s Opening-Up Foreign Banks in China外资银行在中国 200 rep offices 代表处 42 locally incorporated institutions with 253 branches & subsidiaries 本地法人及分支机构 94 Foreign bank branches 外国银行分行 Asset 2.3 trillion RMB 总资产，23.60% 资产增长 Total loans of 1.0 trillion and total deposit of 1.3 trillion NPL ratio of 0.6% and provisioning coverage ratio of 243.5% 1.93% 市场份额 8

9. Chinese bank’s challenges in the future International European Sovereign debt crisis,international financial crisis the slowdown in the emerging markets Weak external demand Domestic Slowdown of the Macro-economy :China GDP ratio 7.8% of 2012 Strategic transformation of economic infrastructure Real estate and local government financial arm’s borrowing Financial disintermediation and intrest rate liberalization 9

10. Chinese Financial Sector’s Global Presence Chinese Banks Global Expansion as of June 2013 亚洲、欧洲、美洲、非洲&大洋洲Asia,Europe,America,Africa&Oceania 政策性银行及开行设立6家海外机构，参股2家境外机构Policy banks&CDB 5家大型银行收购/参股10家金融机构开设105家海外机构Large bank 8家中小商业银行设立14家海外机构，2家中小商业银行收购或参股5家境外机构；Small&Medium Bank 20 subsidiaries,65 branches and 23 affiliated corporations;Invest in equity/acquire 16 foreign institutions 设立子行20家，分行65家，附属公司23家，参股和收购境外机构16家 Covering commercial bank,Investment bank and insurance services,etc 业务覆盖商业银行、投资银行、保险等多种金融服务领域 5家大型银行、3家股份制商业银行、1家农村商业银行在港上市 9 banks was public listed in HK 10

11. About CBRC银监会概况 • April 2003 成立时间 • Organization Structure组织架构 head office provincial offices-36 field offices-300 supervisory agency offices-1735 • Employee 雇员

12. 跨境监管与跨境危机处置Cross-border Supervision and Banking resolution 双边监管合作备忘录48个 MOUs&EOLs 国际组织 G20 BCBS FSB IMF 《有效银行业监管核心原则》Core Principles of Effective Banking Supervision 上海案例、深圳案例Shanghai&Shengzhen Case 上海联合银行UOB-FDIC 2012年2月21日与中土签订《跨境问题机构处置合作协议》Cross-border resolution Agrreement with FDIC and Turkish Authority 12

13. The supervisory practice of Chinese banking industry The banking industry must consistently support the real economy The real economy is the foundation of the financial industry The amount of the loans in the banking industry matches the pattern of the economic growth Allocation of the financial resources is the key to support the real economy,for example:small and micro enterprises Financial innovation should satisfy the diversified demand of the real economy 13

14. The supervisory practice of Chinese banking industry Control risk contagion between the banking industry and “shadow banking”system The international society pays close attention to the Shadow banking system after the financial crisis The probability of the systemic risk caused by the shadow banking system in China is low The CBRC establishes mechenism to prevent risk contagion in order to stop the regulatory arbitrage 14

15. The supervisory practice of Chinese banking industry Early risk alert and intervention Risk alert is one of the important parts in comprehensive risk management The CBRC emphasis on early risk alert and intervention: Establish early risk alert system; Risk alert to the banks on regular basis; Improve daily risk monitoring on large corporate customers 15

16. The supervisory practice of Chinese banking industry Improve the consolidated supervision and consolidated capacity Supervisory authorities should strenthen the consolidated supervision of the banking groups The consolidated supervision framework in CBRC Issued Guidelines of the Consolidated Supervision in 2008; Require the banks to improve their comprehensive consolidated management; Monitor and analyze risk indicators on consolidated bases; Conduct on-site examination on consolidated management of the banking groups; 16

17. Basel III regulation in China Why China is so active to implement Basel III Difficulties and confrontations from the banking sector and other ministries Capital supervisory regulation in June 2012 Qualified capital instruments guidelines in Dec 2012 17

18. Strengthen supervision on SIFIs Strenthening supervision on SIFIs is the key of the internationl financial reform The supervision practice on SIFIs of CBRC Higher capital adequacy ratio standard; Establishment of dynamic mornitoring system for SIFIs; Host International Supervisory Colleges For the Bank of China(the G-SIFI) Establish crisis management working group Formulate resolution&recovery plan Conduct targeted onsite examination on internal risk management in the G-SIFI 18

19. Conclusion “多少事，从来急；天地转，光阴迫” 19

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