The Economists magazine (Oct. 29, 2005) has a data filled article on the biggest banks in China and how these banks compare to those of other countries.
While I don’t quite understand many financial terms (e.g. capital-adequacy ratio, in case you are curious) in the article, there are some plain English and numbers that I do understand.
For instance, it cited a Merrill Lynch number saying that in the last eight (8) years, Chinese banks in aggregate lended more than $250 billion to consumers, a growth of 123 (one hundred twenty three!) times in that short eight years. You may have heard of the real estate boom in China, which contributed a large portion of the growth in consumer loans, i.e. mortgage.
The only publicly traded bank of the four largest banks in China, i.e. China Construction Bank, boasts a market capitalization of about $66 billion, following its successful IPO in Hong Kong. This is bigger than American Express and is only about 1/4th of the size of the world’s largest bank, the Citigroup. (Note: a smart investment of $4 billion by BofA before CCB’s IPO has since seen its value doubled.)
The artical also points out that the Chinese banks have a heavy reliance on loan interests for their profit, with only 13% of total revenue coming from commissions and credit card fees. With a failed bond and stock market, and a consumer body loath of carrying credit card debts, where do you find those commissions and fees?