In recent years, with the advancement of financial supply-side structural reforms, commercial banks have continued to actively embrace financial technology and promote digital transformation. Overall commercial bank operations have been stable. In 2020, commercial banks focused on risk capabilities, with net profits experiencing negative growth for the first time in five years, and significant results in comprehensive risk management capabilities.

The overall operation is good, with net profit declining for the first time

In recent years, commercial banks have continued to actively embrace financial technology and promote digital transformation, and the overall industry scale has continued to expand. From 2014 to 2019, the total assets of my country's commercial banks increased from 130.8 trillion yuan to 232.34 trillion yuan, continuing to develop steadily.

As of the end of 2020, the assets of China's commercial banks have increased to 265.79 trillion yuan, an increase of 14.40% compared with the same period in 2019, and the development trend is good.

From 2015 to 2019, the net profits of my country’s commercial banks showed an overall upward trend. With the advancement of financial supply-side structural reform, my country's commercial banks are operating generally soundly. From 2014 to 2019, the net profit scale of my country's commercial banks continued to expand, reaching 1.99 trillion yuan in 2019, a year-on-year increase of 8.7%.

Since 2020, the total amount of credit provided by the banking industry has remained high, and sufficient funding sources have supported the acceleration of asset expansion. Coupled with the "volume increase and price decrease" and the periodic pressure on asset quality, the overall profitability of commercial banks has There was a decrease compared to the same period last year.

In 2020, the asset profit rate of my country’s commercial banks was 1.1%. The net profit of commercial banks was 1,939.2 billion yuan, a decrease of 2.5% from 2020. This is the first decline in net profit since 2015.

The effect of improving risk management capabilities is significant

Non-performing loan ratio has declined

Since 2018, the overall non-performing loan balance of my country’s commercial banks has shown an upward trend, and the non-performing loan ratio has fluctuated The increase is mainly affected by multiple factors such as slowing economic growth, shrinking external demand, and corporate operating difficulties. As of the fourth quarter of 2020, the balance of non-performing loans of my country's commercial banks was 2.7 trillion yuan, and the non-performing loan rate was 1.84%, which was a decrease from the third quarter of 2020.

The loan-to-deposit ratio fluctuates and rises

The liquidity of a bank refers to the ability of a bank's assets to be liquidated quickly. Liquidity is mainly measured by the loan-to-deposit ratio and the liquidity ratio. Generally speaking, the lower the loan-to-deposit ratio, the higher the liquidity ratio, and the higher the bank's liquidity. Due to their large scale and sufficient sources of deposits, state-owned banks have low loan-to-deposit ratios.

Due to geographical restrictions on business operations, city commercial banks also have lower loan-to-deposit ratios. However, after the implementation of the cross-regional business strategy, its loan-to-deposit ratio will have room to increase. Since 2018, the loan-to-deposit ratio of my country's commercial banks has shown an overall upward trend. In the fourth quarter of 2020, the loan-to-deposit ratio of my country's commercial banks was 76.81%.

Capital adequacy ratios continue to be optimized

Data from the my country Banking Regulatory Commission show that in 2020, the capital adequacy ratios of China’s commercial banks continued to rise. As of the end of the fourth quarter of 2020, the capital adequacy ratios of my country’s commercial banks The core capital adequacy ratio is 14.70%, and the core capital adequacy ratio is 10.72%, of which the core tier-one capital adequacy ratio is 10.72%.

—— For more data, please refer to the "Credit Risk Management and Industry Credit Strategy Analysis Report of Chinese Commercial Banks" by Qianzhan Industry Research Institute