Year 2012 Aimed Economic Trouble Recorded by China Bank
As reported by the Chinese bank that there was a high record net profit in the year 2011, where in the year we saw a lot of manufacturer were struggling to the increasing cost of the liquidity.
The Chinese Commercial leader has net profit more then 1 Trillion Yuan which is a increase of 96.3 percent as compare to the last year, according to the data reported by the Chinese bank.
The bank also reported that the in year 2011 the net interest income was around 2.15 Trillion Yuan that is up by 29.3 percent as compare to the previous year, whereas the non-interest income was raised to 46.3 percent to get to 514.9 billion Yuan.
Total assets of the lenders were reached to 88.4 Trillion Yuan till the end of year 2011, whereas in the previous year it was lesser by 19.2 percent.
Deputy Secretary of China center for International Economy, Chen Yongiie said “The net capital profit of the Chinese bank is 12 times more as compare to the manufacturers.”
Guo Tianyong, Director of the Central University from Financial Research Center said, “While high profit is enjoyed by the commercial banks. As compare to the previous year their rates has fallen down.” He also said that in year 2005 and 2006 the profit rate was between 50percent to 60 percent.
For stronger bargaining power the bank have enjoyed a close monopoly and because of that it has resulted to a high barrier for those who have entered this industry and it is also true that the interest rate is not set according to the marker force, said Guo Tianyong.
The Chinese bank was exited to get the capital, instead of profit. Particularly after seeing the deposits were exhausted. But it seems that in the second half the Chinese bank the regulator commission will be adopting the higher capital.
Increase of bad loan:
In the same time the industries were under pressure because there was an increase of non-performing loan in the fourth quarter.
Till the end of year 2011 the loan ratio raised at 0.96 percent that is up by 0.01 percent by the third quarter. 20.1 billion Yuan increased the amount of bad loan in the fourth quarter.
As predicted by the USB Securities Co. Ltd, that the bank from China will face the capital fall that would be more then 220 billion Yuan in year 2012 and they need more help till year 2013 that is around the capital of 295 billion Yuan.
As reported by the local media that the lenders from public might be raised to more then 100 billion Yuan by equity finance for this year and they are also heading forward to sale the bond so that they refill the capital.
After having a bad refinance in year 2011, the average capital ratio of the bank reached to 12.7 percent till the end of 2011 that was 0.55% high as compare to the previous year that was 0.39% higher.
The bank has unwilling to lend more and also the bank call for better financial support that will go in the real economy, wherein this part of the economy involves products, services and goods as it would be an part of economy.
The investors from Central Huikin Investment Co, that is the State part of the Chinese “Big Fourth” has approved to decrease the ration of the third state lenders. The ratio will be lowered by 5% and will be taken it to 35%, as said by the Industrial and Commercial Bank of China Ltd.