PwC: Chinese bankers preparing to meet challenges

By Rob Starr, Content Manager, Big4.com

Over 60% of bankers believe that interest rate liberalisation poses challenges to their business in the next three to five years.

The announcement of the People’s Bank of China to raise deposit interest rates in June 2012 was beyond the expectations of most bankers. According to the results of the fourth PwC/China Banking Association (CBA) Chinese Bankers Survey 2012, less than three in 100 of the bankers surveyed anticipated the start of interest rate liberalisation last year (the questionnaire was released in April 2012).

According to the survey, 41.2% of the bankers surveyed choose to diversify business into other types of financial services. 33.9% and 29.4% of the bankers decide to adjust business structure and customer structure respectively as the keys to their strategic transformation.

Compared to 2011, there has been a significant growth in wealth management business, primarily because of increased competition for customer deposits; tightened monitoring of credit extension; capital adequacy and loan-to-deposit ratio constraints imposed by the regulators; and a general shortage of other investment products and channels. The bankers surveyed expressed strong support on expanding wealth management business (80%).