More about Chinese Banks

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These days the Chinese bank stocks are flying high. At the same time the competition also intensifies as the foreign bank are formally opening branches next Monday. The domestic players are raising fund through IPO: with the recent IPO of ICBC (601398.SS) and Bank of China (601988.SS); the new IPO of China Citic Bank, the “Haigui IPO” of Bank of Commincations (3328.HK) are on the horizon; some local commercial banks (used to be credit unions) are also preparing IPO, notably Bank of Nanjing, and Bank of Ningbo.


Banks are definitely making money. I think the real estate is a big one from the consumer side (and business side too). The risk there is the slow down of the real estate market amid recent “clamp down” policies. The credit card business is also taking shape. I saw people promoting credit cards at the exit of metro (subway). In both cases if the consumer can not pay back the loan (mortage in the case of housing), the banks will take a hit. It’s amazing for me to see the “bad loan rate” for some Chinese banks (e.g., Xing Ye Bank) are under 2.7%. I remember years ago ICBC has bad loan rate more than 20%.

About the service, expect long lines in most banks. This will not change after the openings of foreign banks. Because the VIP account need CNY 1 m. On the other hand, there are lots of ATM machines in the branches, we can do simple things such as “deposit money” on the machine, without waiting inline.  


  1. The Chinese Banking Association with the 39 member Chinese banks which include the Big 4 will on April 20 stop the inquiry fee of 3 jiao. What it means you can go to ICBC ATM machine with a Bank of China ATM card to find out how much money you have.

    Why they do this because of foreign competition? Look at the services of Chinese banks. I would change to foreign banks instantly if they have one located in their city. The service in foreign banks are much better.

    It depends on what their service charges are though. I’m glad HSBC will open a branch in Shenyang although not in Shenyang now. I’m in Daqing. I don’t expect China Merchant Bank and the four foreign banks to open branches in small cities. That’s for sure.

    Consider this in HSBC HK to open a Premier account with no service charges will be a 1 million HKD but HSBC China will be 400,000 RMB.

    Regarding to Credit Cards. It is a difficult process to get it if you are a foreigner. No English forms. Even HSBC and Bank of Communications have issued joint Credit Cards, there are no English forms to fill. It is all in Chinese. How would foreigners apply for it then? Beside they need to many requirements.

    China Merchants Bank Credit Card has less requirements but still only in Chinese. I really don’t know why they don’t have it in Chinese forms. Maybe I’m in the wrong city. Maybe Beijing or Shanghai have English forms.

    Then you ask when you get a credit card where can you use it though?
    A lot of shops still don’t use credit card but Union pay though. Unless the credit card has a union pay symbol, it won’t be too useful to use in most places though.

    I’m using Agricultural Bank right now, they don’t charge fees for sending money to other accounts through online banking. Even if you send money to a competitor’s banks, it is still free though. But I don’t know what other banks won’t charge for transfering money online. Maybe it is Daqing only. Anyway, if you always transfer money online to other bank account holders. You can check out Agricultural Bank then.

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