Harshly denounced on Chinese Banking System----Why always people foot the bill for its monopolized windfall profit ?

Recently, the Vice Secretary General of China Centre for International Economic Exchanges (CCIEE), Y.J. Chen stated that “the windfall profit in Chinese bank industry has outstripped the profit in industry of tobacco and petroleum”. Since then, a remark caused great controversy immediately in the society. The bank industry again has been harshly denounced by major people due to its extravagant profits and monopolized power. In addition, the summarized report of Bank Performance in 2011 indeed verified this “windfall profit” statement. Usurious interest margin, high transaction cost, frequently and overwhelmingly growth on financial products conducting has become the root of the phenomenon, to make things even worse, the major victims are the vast number of depositors, lenders and Chinese real economy, who foot this bill unwillingly.

The windfall profit and overtop salary makes banking the most popular industry. We can explain it with Performance Report in Banking Industry of 2011 as a reference, for example, the bans of “Shenzhen Development” in 2011 declared that the net profit assigned to the shareholders in quoted company is around 1 billion to 1.061 billion pounds, year on year growth rate was about 60% to 70%; the Shanghai Pudong Development Bank attained the net profit of shareholders assigned to the parent company is about 2.724 billion pounds, year on year growth rate was 42.02%; the China Industrial Bank has earned 2.515 billion pounds in 2011, year on year growth rate was 37.74%. Above all, the growing speeds of Listed Commercial Banks’ profit are all exceed the market expectation, respectively.

According to the statistical data of China Banking Regulatory Commission (CBRC), in the first three quarters of 2011, the accumulated net income of Chinese commercial banks was 81.73 billion pounds, year on year growth rate is 35.4%, quite near to the after-tax net income of the whole year of 2010, the average capital profit ratio is about 22.1%, the operating costs have increased by 20.85 billion pounds; profit per capita is around 40 thousand pounds. As rough estimation and prediction based on this results , the accumulated net income of Chinese commercial banks will increased to 100 billion pounds by the end of year 2011, so does the profit per capita will up to 50 thousand.

But compared to this, the net profit of large scale major industrial enterprises in the first three quarters are merely around 368 billion pounds, spread and distributed by 87 million people (workers), the profit per capital is just no more than 4,000 pounds.

Meanwhile, under the high net income, the high salary and year-end bonus in bank industry also leave others too far behind to catch up with. For example, in 2011, the regular staffs with up to 3 years’ working experience can get a year-end bonus for around 8000 pounds. Notably, the staffs employed in small and medium size equity banks always attain more than those in the large scale nationalized bank.

Furthermore, in the Various Sectors of Salary Ranking List, financial sector is still unbeatable. From the report, Minsheng Bank ranked the top with respect to the labor payoffs of first half year of 2011, which is as higher as 19.07 thousand pounds; come next is the China Merchants Bank, which is 17.89 thousand pounds. Among the 16 Listed Commercial Banks, there are 10 banks with employee payoff exceed 10 thousand pounds, the other 6 are consists of 5 major nationalized banks and Beijing Bank.