Today, I posted a topic on the Communication Planet APP, "How should banks survive the cold winter when the effective demand for credit is insufficient?" I thought of this topic because I saw the weak data of social finance and M1 in April.
So at the bank level, is there anything to do?
The first reply I received was "lie flat".
This somewhat disappointed me.
However, when the communication increased, I found that in addition to "lying flat", there are still points that can be improved.
These points are neither one-finger Zen nor fast-acting medicines, many of them are common sense, which can be described as "the road to simplicity".
To put it bluntly, it is necessary to respect common sense, respect the market, and patiently let change happen.
Taipei?
"Lie flat, don't think too much", when I asked how to solve the lack of effective demand for credit, a Beijing-based joint-stock bank friend replied to me.
"Can you just lie flat?" , I'm a little unwilling.
"Yes, for the vast majority, after all, there are only so few high-quality resources", he went on to say the reason, "Do it, take the risk, the current supervision is so strict, frequent, Pratt & Whitney can do it, but face the same problem." If it is overdue, it will be investigated and deducted, so lying flat is a relatively good choice."
I threw the same question to a banker in the South.
He replied, "It doesn't seem like there's anything particularly good about it right now." He told me that he mainly followed the direction of the government, such as science and technology innovation loans, equipment renewal loans, etc., but the decline in income was obvious, and individual loans were even loss-making. These loans can be larger, but the competition is too strong to make money at all.
"Lie flat". This Chinese online term originally referred to a negative attitude towards life, that is, in the face of pressure and competition, choosing to give up the struggle and no longer work hard or pursue success. Now it is widely used to describe a low-desire, low-consumption lifestyle. In the eyes of many young people, "lying flat is justice" is not only their self-deprecating and joking words, but also a realistic choice in the face of the dilemma of involution.
Now, the term is also applied to a wide range of industries, including banking.
"All industries are not good, so I want to open a few before I lose my job," said the above-mentioned bank staff member in Beijing.
Manage risk
If you take it literally, it may be negative, but it makes sense to understand it in terms of reducing risk appetite, and it points to what banks can do in a downward cycle – defensively.
A veteran investor said that the most important thing for a bank is its balance sheet. So, looking at the balance sheets of banks, it is necessary to be defensive in this environment. The lack of effective demand indicates that the outside is deflationary. The credit risk, liquidity risk and market risk of the asset are exposed. The most important thing for banks is not to step on the thunder and eliminate risks as much as possible. Restrict investment in high-risk areas and clean up the risk of stock assets. Reduce leverage, maintain higher asset liquidity, and increase cash reserves.
Coincidentally, a person from the risk department of a major state-owned bank also said frankly that the state is very clear about the stage of economic development we are currently in, and it is also expected that the bank's profitability will decline. Even if we can put in all kinds of renewal loans, it is difficult to maintain a level of construction period in terms of total volume and yield, and coupled with the decline in external demand, the actual environment is even more severe. But it can't be helped, it's also a process of rebalancing China with other countries.
In his view, many of the previous risks were caused by idling, and if these loans were arranged according to the current development rate of the real economy, the growth rate of loans would definitely shrink, and the returns would decline.
"Therefore, depending on how to talk about risk, it is difficult for China's commercial banks to operate completely as a bank, and in the period of economic slowdown and rising risks, its risk accumulation must be higher than the interest rate spread," he said.
For example, in the past few years, China CITIC Bank has changed from "removing burdens" to "stabilizing quality", so that the entire risk index continues to improve and stabilize, and gradually moves forward in the ranking of joint-stock banks.
Practice internal skills
Iron striking still needs its own hardness, so is the problem that banks are facing today related to the bank's past behavior?
Naturally!
The banker in a southern province said that in the past few years, corporate account managers were mainly platform companies, and personal account managers were mainly mortgages, and now these two have been seriously affected, but many account managers no longer do other loans.
A person from the war management department of a major state-owned bank also said frankly that the demand for credit is insufficient, and there seem to be many solutions, such as doing some asset-light business, doing medium income, and so on. However, in reality, there is a high demand for competence.
"At least, I don't think Chinese banks can solve it." He said.
Although it is a bit pessimistic that it cannot be solved, it does require more relaxed institutional support for the ability to practice.
Among them, more than one friend mentioned "accountability".
At present, banks make loans, in addition to inclusiveness, they are described as bad, and they are basically held accountable. The regulatory system and the industry system are too strict and do not match the actual situation, so they basically have to be held accountable. For example, the issue of the use of funds is almost a panacea clause, whether it is the punishment of the bank by the regulator or the internal accountability of the bank, any loan can basically find out the problem in this regard.
"Accountability" is only one aspect, and in practice, institutional reform of banks must continue to create a better environment for innovation. Of course, the institutional environment in which China's banking industry operates is particularly constrained, but there is actually room for marginal improvement within each bank.
Expect policy and respect for the market
"This is not a problem that banks should consider, it is something that the country should consider", he is the most vocal person in China Merchants Bank, and he replied to the post like this.
However, as a shareholder of the bank, he certainly hopes that the bank can do a good job, and he put forward three suggestions from the macro level:
issuing treasury bonds to increase the deficit rate, engaging in infrastructure, major projects, and livelihood projects;
Bank supply-side reform, closing too many banks to reduce the growth rate of overall money supply, and ensuring that excellent banks are better and stronger;
Increase social security, eliminate people's worries, and stimulate consumption potential.
In fact, while looking forward to the macro policy, more than one friend mentioned the role of the market.
A friend who has been in the bank all his life told this analogy:
"Just like when a person is old or sick, the first thing to do is to make the person healthy, and then let him take more tonic and nutritional supplements. If you have to force him to eat, the person will be ruined, the medicine will be ruined, and the food will be ruined."
He suggested that first of all, under the premise of respecting the market, banks should see what they can do, which is a problem that banks should consider, rather than desperately creating demand, and some demand cannot be created.
At the same time, based on the current market situation, there may not be so many banks in the market, and through a natural market exit, the situation of more monks and less porridge can be alleviated.
"Big banks may still have a slight advantage, many small banks, especially in the central and western regions, may die out relatively quickly, this trend is difficult to reverse, too small banks do need to integrate."