Yi Xianrong: The Bank Has Bid Farewell To The Era Of High Profit Growth.

According to the published results, by the end of 2014, the profits of the Agricultural Bank had reached 179 billion 500 million yuan, the growth rate was 8%, the capital adequacy ratio at the core level fell, and the non-performing loans and non-performing loan rates rose by two.

All this means that the high profit growth era of domestic banking industry has ended and the quality of bank assets is declining.

That is to say, in the first ten years, the Chinese banking industry had an unprecedented golden development period under the care of the government policy, but with the change of the general trend, the golden period has ended.

It can be said that during this period, the domestic banking industry, as long as it can enter, no matter how the operation capacity, no matter how the strength of the capital, no matter how the human capital of its institutions, can gain considerable profits, and all of them can develop rapidly, will be able to realize the rapid growth of bank profits and the excessive expansion of credit scale.

However, since the second half of 2013, great changes have taken place in the domestic market environment, and the development of domestic banking industry is facing great challenges.

First, the development of Internet technology and the emergence of smart phones, it has completely changed the way of human life, consumption patterns, communication methods, but also changed the way of production and business.

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These will bring huge impact and impact to the modern financial industry.

Therefore, if the modern banking industry can not get out of the traditional product, service and risk management mode, use the existing scientific and technological tools, face the personalized financial consumption in the Internet era, innovate and serve its financial products, financial markets and financial instruments, and comprehensively change the behavior mode, business mode, profit mode and risk management mode of the domestic banking industry, then the domestic banking industry will not be able to get out of the current predicament.

For example, the loss of deposits, the development of financial disintermediation and the explosive growth of Internet finance are all seriously affecting and eroding the domestic banking industry.

Two, interest rate marketization reform is accelerating, and it will be an unprecedented challenge to the banking industry which is coming from planned economy.

Because interest rate liberalization requires every bank to be the main body of risk pricing.

Banks should not only independently price different credit relationships at different risks, but also be responsible for pricing such risks.

Because the deposit interest rate that is constantly being liberalized, or even the last fully liberalized deposit interest rate, will be the most stringent cost constraint of the domestic banking industry.

This requires not only the banking industry to enhance its risk pricing capability, but also the overall responsibility of the banks themselves.

Under such circumstances, the government's policy to protect the banking industry will be completely withdrawn, and the government's injection of policy resources into the market will also be withdrawn from the market.

These will all affect.

Level and significant impact on it.

Therefore, in the face of fierce market competition, if a bank can not enhance and innovate its capabilities in products, services, marketing, management and risk pricing, the bank may face the risk of being eliminated from the market.

The introduction of the deposit insurance system also means that in the face of fierce market competition, banks operating at home are always facing the risk of bankruptcy.

In the past, as long as we entered the banking industry, the profit making days would end.

Three is China's economic development in recent years.

Development is accompanied by the "real estate" economy and growth.

Under the model of "real estate" economy, excessive credit expansion is the main tool for the development of the market.

Of course, excessive credit expansion not only increases the growth of GDP, the bubble of real estate, the price of the real estate market, and the accumulation of large amounts of credit funds in the housing market.

Under such circumstances, the expansion of passive credit scale in the domestic banking industry can make a lot of profits.

The banking industry does not need to make risky pricing of credit, nor does it need to consider the financial risks of excessive credit expansion.

Because as long as housing prices are rising, banks' credit assets are high-quality assets.

However, since the second half of 2013, the cyclical adjustment of the domestic real estate market has begun, and the anticipation of the investment oriented housing market has also undergone a comprehensive reversal.

Under such circumstances, not only the credit assets that account for the absolute high proportion of bank assets are facing great risks, because the fall in house prices is always increasing the bad loans of banks, and more importantly, banks are faced with the trend of the adjustment of the domestic real estate market, so we have to change the existing business models, so we have to ask banks to retrain the growth point of profit.

That is to say, with the cyclical nature of the real estate market, the risks of the domestic banking industry will continue to be exposed. The rising rate of non-performing loans and non-performing loans will become a trend, which will seriously affect the quality of domestic banks' assets and also need to relocate themselves.

In particular, the current periodic adjustment of the domestic real estate market will be a long-term process, and it will take more than 10 years.

Therefore, for the domestic banking industry, how to deal with the major long-term real estate market adjustment period, whether it is profit and asset quality are facing enormous pressure, the past high profit growth era has ended.

Whether domestic banks should get out of the current predicament will have to carry out a series of major reforms.