In the eyes of many people, banking is a stable industry. After all, banks are huge, and the scale of fund management is also large. Under such circumstances, banks may not be able to guarantee positive profits every year, and there will be certain losses in some years.

The net profit of national 18 banks fell by more than 30%.

First of all, it should be emphasized that these 18 banks are mainly small and medium-sized banks, which have nothing to do with the construction of China's agriculture, industry and commerce. For these small and medium-sized banks, the non-performing loan ratio of these banks showed an upward trend last year because of the COVID-19 epidemic, and the non-performing loan ratio of some banks even reached more than 3%, which is very exaggerated in the banking industry. These so-called banks, whose net profit has fallen sharply, are all small and medium-sized banks, and their ability to resist risks is relatively weak.

The non-performing loan ratio has become a big problem.

Because the economic situation last year was not very good, many people defaulted on their loans. For those small and medium-sized banks, their ability to resist the risk of such loans is poor, not to mention that these banks did not strictly control the issuance of loans, resulting in a serious decline in net profit last year. Not all banks are due to the problem of non-performing loan ratio, but some banks have directional problems because of business competition.

These banks have problems in business competition.

As I mentioned above, these banks are not competitive by themselves. In the market competition, these banks are at a disadvantage in the process of competing with other large state-owned and commercial banks because they have not adjusted their business direction in time, such as digital banking and online business, which we often mention. I believe that with the continuous recovery of China's economy, the business of these banks will be restored to varying degrees, but in the long run, their competition with large banks is still not optimistic.