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2023 Annual Reports of 58 Listed Banks Raise Serious Concerns

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported a summary of the results from the 2023 annual report disclosure published by 58 listed Chinese banks.

In 2023, while China’s economy was broadly under pressure, the banking sector faced operation and development challenges of its own. Banks’ net interest income suffered a year-over-year decline for the first time since 2017. Also, the average net interest margin of listed banks was 1.69 percent, declining for the fourth consecutive year. Net fee and commission income decreased by 8.05 percent year-over-year, declining for two consecutive years. Listed banks achieved a total revenue of RMB 5.87 trillion yuan (around US$827.8 billion) in 2023, a year-over-year decrease of 0.98 percent.

Digital intelligence capabilities have become the core competitiveness of listed banks. It is worth noting that, in 2023, the banking industry paid a lot of attention to large data models, with more and more listed banks deploying large model technology. For example, in 2023, ICBC (Chinascope Editor’s Note: ICBC, the Industrial and Commercial Bank of China, is the largest bank in the world by total assets) established the industry’s first fully-independently-developed large-scale AI model, with hundreds of billions of parameters, deploying innovative applications to multiple financial business scenarios.

For some small and medium-sized banks, it may be difficult to find the resources required for digital transformation. This could lead to further intensified differentiation within the industry.

Source: Sina, May 15, 2024