Excellent risk control ability is one of the core advantages of bank competition. With the release of the performance reports of listed banks in 2021, the asset quality of the banking industry has aroused widespread concern. Many non-performing loans of listed banks showed a “double drop”, the risk offset ability was further improved, and the risks in key areas were controllable… What signals did these highlights reveal? How will banks deal with risk challenges this year?
The reporter found that in 2021, the non-performing loan ratio of the six major state-owned commercial banks decreased, and the asset quality of some joint-stock banks also showed a good trend.
At the end of 2021, Bank Of Communications Co.Ltd(601328) NPL ratio decreased by 0.19 percentage points to 1.48% compared with the end of the previous year, with the largest decline among the six major banks Postal Savings Bank Of China Co.Ltd(601658) NPL ratio was the lowest, down 0.06 percentage points to 0.82% compared with the end of last year; The non-performing loan ratio of the four major banks of industry, agriculture, China Construction Bank and China Construction Bank decreased to 1.42%, 1.43%, 1.33% and 1.42% respectively. Meanwhile, the NPL balance and NPL ratio of China Citic Bank Corporation Limited(601998) , China Everbright Bank Company Limited Co.Ltd(601818) showed a “double drop”.
According to Fang Heying, President of China Citic Bank Corporation Limited(601998) bank, the improvement of many indicators of asset quality stems from the improvement of bank risk control system, the optimization of asset structure and the basic clearing of historical risk problems.
In order to resolve risks in a forward-looking manner, many banks have strengthened their disposal efforts. In 2021, ICBC’s collection and disposal of non-performing loans exceeded 190 billion yuan; BOC resolved about 100 billion yuan of potential risks and disposed of nearly 150 billion yuan of non-performing loans.
Cheng Yuanguo, chief risk officer of CCB, said at the performance conference that in the process of accelerating the construction of a new development pattern, the risk release and clearing of local fields and individual customers are inevitable. CCB will continue to strengthen the resolution of non-performing assets, replace cages with birds, support the superior and limit the inferior.
Risk management needs to take precautions, and the risk offsetting capacity of listed banks will continue to improve in 2021. The annual report shows that at the end of 2021, the provision coverage rate of ICBC rebounded to more than 200% for the first time in seven years; The provision coverage rate of ABC was 299.73%, an increase of 33.53 percentage points over the end of the previous year.
This year, the internal and external environment for the development of commercial banks is severe and complex. Some industries and customers greatly affected by the epidemic and economic cycle have difficulties in operation, and the asset quality still faces certain structural pressure and challenges.
It can be seen from the information disclosed at the performance press conference of many banks that many banks will continue to optimize the credit structure this year, focus on key areas, strengthen risk early warning and improve their fine management level.
Zhang Wenwu, vice president of ICBC, said that the bank would formulate medium and long-term plans for investment and financing business, and do a good job in the selection and distribution of credit assets in a forward-looking manner. Continue to focus on key areas such as major infrastructure construction, national strategic emerging industries, emerging manufacturing and the transformation and upgrading of traditional industries, so as to lay a good foundation for the improvement of asset quality.
Cheng Yuanguo said that the long-term fundamentals of China’s economy have not changed. CCB will continue to optimize the credit structure, further strengthen Inclusive Finance, green finance, consumer finance, housing leasing and other services, and increase its support for the real economy.
Many bank executives said that they would continue to balance the relationship between business development and risk prevention and control from the perspective of serving the overall development of the real economy, boost high-quality development with high-quality risk control, and ensure stable and controllable asset quality.
ABC said it would actively implement the national policy guidance, continuously improve the fine and differentiated management level of industry, region, customer and product policies, further promote the digital transformation of management, and strengthen the application of financial technologies such as big data in forward-looking identification of credit risk and competition control.
“We are full of confidence in the stability of the macro-economic market, as well as our own risk control ability and risk resolution ability.” Zhang Qingsong, President of the Agricultural Bank of China, said.
