China Postal Savings Bank Eyes Small-scale Loan Business
Postal Savings Bank of China feels rising pressure after the nation raised interest rates and unified the deposit reserve ratio last year.
In order to reduce pressure and lift profit, the bank, which is shifting into a commercial lender from previously a savings-focused bank, plans to attach more importance to boosting its small-scale loan business.
Notably, it is said to have held a special meeting, at which top executives responsible for small-scale loan business of braches of the bank nationwide exchanged their ideas and information regarding to loan pricing, marketing, risk management and etc.
The meeting was held with a mission to help the bank boost its small-scale loan business and create more profit-making channels, revealed insiders.
The boom of the business will play a significant role in helping the bank shift into a commercial lender, Liu Andong, chairman of Postal Savings Banks of China, pointed out on the meeting. He encouraged those executives to try their utmost to become bankers rather than employees at banks.
Actually, the bank launched small-scale loan service in the domestic market one and a half year ago. However, the size of loans it granted is not more than CNY 1 billion, compared to a total deposit of CNY 1.7 trillion.
Reasons are various, said the insiders. Some think that the credit line of the bank’s small-scale loan business is too low and others believe that the lending rate is too high. In addition, some of its branches seem to have been familiar with their existing businesses and decline to attach importance to the small-scale loan business.
It will further perfect its sales network, in a bid to ensure its outlets to be situated in not only the nation’s urban areas but also rural areas. Apart from setting up independent loan divisions, the bank’s city-level braches are required to pay more attention to employee training. Its bad debt rate should be less than 1 percent, or branches concerned should stop granting loans.
(USD 1 = CNY 6.82)
Postal Savings Bank of China feels rising pressure after the nation raised interest rates and unified the deposit reserve ratio last year.
In order to reduce pressure and lift profit, the bank, which is shifting into a commercial lender from previously a savings-focused bank, plans to attach more importance to boosting its small-scale loan business.
Notably, it is said to have held a special meeting, at which top executives responsible for small-scale loan business of braches of the bank nationwide exchanged their ideas and information regarding to loan pricing, marketing, risk management and etc.
The meeting was held with a mission to help the bank boost its small-scale loan business and create more profit-making channels, revealed insiders.
The boom of the business will play a significant role in helping the bank shift into a commercial lender, Liu Andong, chairman of Postal Savings Banks of China, pointed out on the meeting. He encouraged those executives to try their utmost to become bankers rather than employees at banks.
Actually, the bank launched small-scale loan service in the domestic market one and a half year ago. However, the size of loans it granted is not more than CNY 1 billion, compared to a total deposit of CNY 1.7 trillion.
Reasons are various, said the insiders. Some think that the credit line of the bank’s small-scale loan business is too low and others believe that the lending rate is too high. In addition, some of its branches seem to have been familiar with their existing businesses and decline to attach importance to the small-scale loan business.
China raised its interest rates several times in 2007, which brought the bank more pressure in cost, as the channels for it to invest the deposits are limited. So the bank’s profitability is challenged. In order to change the situation, it plans to boost its small-scale loan business first.
It will further perfect its sales network, in a bid to ensure its outlets to be situated in not only the nation’s urban areas but also rural areas. Apart from setting up independent loan divisions, the bank’s city-level braches are required to pay more attention to employee training. Its bad debt rate should be less than 1 percent, or branches concerned should stop granting loans.
(USD 1 = CNY 6.82)
