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December 10, 2015

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Bleak choice dilemma

AROUND 20 percent of China’s urban commercial banks are set to be acquired or face bankruptcy by 2020 as their profit growth is seen to slow from the country’s economic downturn and the impact of the Internet, an Accenture Strategy report said yesterday.

The average return on capital of the urban commercial banks slid to 16.6 percent in 2014 from 18.3 percent in 2010, Accenture said, due to interest rate liberalization and the range of products launched by the online banking sector.

Roger Yu, managing director at Accenture China, said the competition from online banking and a liberal interest rate environment will force possible acqisitions on them.

There were 133 urban commercial banks in China by the end of 2014, with assets under management at 18 trillion yuan (US$2.8 trillion), taking up 13.4 percent of total assets of the Chinese commercial banks, data showed.


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