Chapter 26 Chapter 4 Freezing Point 2020, Analysis of China's Abnormal Industry

In more than 20 years of economic system reform, our banks have provided funds for a large number of state-owned enterprises for a long time, thus acting as the main payer of the cost of gradual reforms, and the existence of this situation is far from what our banks can independently decide .Until today, this role of "economic shock absorber" has always been included in the main functions of banks, and has almost become a heavy burden that my country's banking industry cannot shake off. Topic Introduction: If the Bank Disappeared - How the Bank Makes Money - The Big Burden of the Banking Industry

If we were to look for one of the most enviable industries, it would be banking. For a normal economic system, the status of banks is very important. As early as the 18th century, the modern banks that had begun to take shape were called "the funnel of the capital formation process". The reason for this saying is that banks unique to the business. We might as well imagine, if there is no bank in this world, what will our life be like? There is no doubt that if the bank disappears, a large source of funds for the enterprise will be missing at once, and the profits of normal operations will be meager. Those enterprises that aim to expand their operations will have to make great efforts to Find funding.

Examples in this regard can be described as colorful as cow hair. In fact, among many private enterprises in the southeast coast, because banks are unwilling to provide them with loans, these enterprises that urgently need cash flow to expand their operations have to pay up to 120% The interest rate is used to borrow from underground banks, and such an interest rate means that if you borrow one yuan at the beginning of the year, you must repay 2.2 yuan in principal and interest at the end of the year. The list goes on and on. If a bank disappears, so do individuals.It is an undeniable fact that although our banks are not strong enough in providing private loans, they are after all the most powerful help we can get in the process of setting up a home. If we lose this reliable source of funds, every A consumer will encounter insurmountable obstacles.

There is no doubt that no matter what the original intention of establishing a bank is, it inevitably contains good elements. The services it provides are vital to long-term economic growth. Banking grows as fast as output grows. From this, we understand the indispensability of banks in the economic system. However, it is not enough to understand these. If we want to explore the development trend of China's banking industry in the next ten years, we must do a better job in the banking industry. In-depth analysis. After we understand the special nature of the banking industry, a very sensitive issue is before us:

How do banks make money? Generally speaking, no matter which industry develops, the most important demand is capital, and in the classification of capital, although monetary capital is the least reliable one, it has the widest application value.Banks are precisely the largest holders of monetary capital, which determines that no matter which industry the demand for funds comes from, whether it is pharmaceuticals, steel, or our application for housing loans, banks can profit from it. It is not enough to just understand this point. In detail, the bank’s money-making model is actually very simple. Its model is nothing more than getting funds from depositors and the capital market, and then lending these funds to companies or individuals in need of borrowing , to obtain profit from the interest rate difference.

For example, if a formal commercial bank obtains a deposit with an annual interest rate of 4% from a depositor, and then lends the deposit to a borrower at an annual interest rate of 6%, in this way, after a As soon as it came out, the bank managed to earn a 2% interest spread, and this money constituted the net interest portion of the bank's income. In addition, the vast majority of banks will also charge depositors or borrowers certain service fees and provide some charging services when providing services. This non-interest income is also one of the sources of profit. The net income of the bank is formed by superimposing the income of these two parts, thus, the profit model of the commercial bank is determined.

In fact, this "waiting for profit" model is not enough to ensure that banks gain an advantage in inter-industry competition. Different from ordinary lenders, banks minimize their risk by concentrating large and diverse loan portfolios. At the same time, they can obtain stable and continuous liquidity through savings business , Compared with those ordinary lenders, banks have the least risk and the most stable income, which determines the foundation of the banking industry's long-term prosperity and ensures the bank's competitive advantage over other industries. In addition, in most countries in the world, the government will provide assistance to major commercial banks, and China is particularly prominent in this regard.

Since our major commercial banks are all state-owned, this nature means that if our commercial banks encounter a short-term crisis of capital chain rupture, the banks can still seek help from the state, and this kind of "special allowance" given by the government "It is difficult for any enterprise to obtain.The essence of this kind of loan actually means that it allows banks to borrow money at almost no interest. On the other hand, due to the strong existence of state-owned capital, many state-owned enterprises can obtain monopoly profits, but where does Liu Xiang get these huge cash flows?The answer is self-evident-almost all large and medium-sized state-owned enterprises have become super depositors of state-owned banks in accordance with regulations.

This kind of low-cost borrowing, coupled with huge and stable savings funds, and the bank's advantages in lending efficiency are enough to constitute a unique environment for banks to survive in the industry. In the past ten years, this advantage has been particularly evident. Even when we do not have a deep understanding of certain confidential data within the industry, we still lament the huge and exaggerated profits of the banking industry. In fact, we see What we have seen is probably only one leg of this financial dinosaur, and its huge body has not even entered our sight. There is often only a very small difference between a good thing and a bad thing.

Taking our banking industry as an example, when the national capital exists strongly in the industry, it brings the unique advantages of the banking industry's living environment. However, this is only one aspect of the matter. When we change our perspective, from the overall perspective Re-examining this situation from a different perspective, the conclusions drawn are completely opposite. Since the bank holds a large amount of state-owned capital, it must compensate the government for its social fairness functions. Especially when faced with the shortage of capital chains of state-owned enterprises, banks from the same branch must provide state-owned enterprises with low interest rates or even no fees. Interest loans, and this behavior itself has actually run counter to the laws of business.

As far as banks are concerned, when providing loans, they will always choose the lender with the highest profit. When state-owned enterprises obtain loans at extremely low cost, the desire to pursue profits has come to naught. What's more serious is that in the accounts receivable of banks, state-owned enterprises often have the highest bad debt rate. For the purpose of escorting economic development, these huge funds are usually resolved by internal digestion of the system. In the American business world, the oil tycoon Paul?Getty's famous quote is widely circulated: "If you owe the bank $100, it's your problem. If you owe the bank $100 million, it's the bank's problem." Such a situation is happening in China's banking industry at the moment. According to industry insiders, many times, in order to save some companies with poor returns, and to save the huge amount of funds that have already been loaned out, many banks have to make repeated and three Some state-owned enterprises have issued loans in the hope that they can turn around their business conditions. In this way, during the economic system reform of more than 20 years, our banks have provided funds for a large number of state-owned enterprises for a long time, thus acting as the main payer of the cost of gradual reforms, and the existence of this situation is far from what our banks can do self-determined.Until today, this role of "economic shock absorber" has always been included in the main functions of banks, and has almost become a heavy burden that my country's banking industry cannot shake off. It is based on this point that the operation of China's banking industry must be linked to the government-led economic growth mechanism to a large extent. Therefore, many market means that are frequently used in mature market economy countries are difficult to play a corresponding role in our country.In the current era of rapid capital flow, such soft constraints undoubtedly mean that China's commercial banks will lose the first move in international competition. The foreseeable fact is that in the next ten years, the biggest problem in China's banking industry is not solely state-owned capital, but the unclear relationship between the property rights of this state-owned capital. If the property rights relationship among investors cannot be truly realized that "the enterprise belongs to the enterprise and the bank belongs to the bank", and the business objectives of the bank cannot be formalized, clarified, and marketized, then no matter how many market management methods there are, it will be difficult to change the question.