Banking and Insurance Regulatory Commission and other six departments joined forces to break the "unspoken rules" of the credit market
Our reporter Liu Qi
In recent years, the banking and insurance industry has continued to increase fee reductions and make concessions, which have played a positive role in easing corporate financing difficulties. However, there are still “unspoken rules” such as unreasonable charges, loan-to-deposit pegs and mandatory bundling in the bank credit market. However, with the formal implementation of the "Notice on Further Regulating Credit Financing Charges and Lowering the Comprehensive Cost of Corporate Finance" issued by the China Banking Regulatory Commission, the Central Bank and other five departments on June 1, it will further regulate the charging and management of all aspects of credit financing and break the credit market "Unspoken rules".
From the specific content of the "Notice", in the credit link, part of the enterprise-related charges will be cancelled, the existing regulations prohibiting the linking of loans and deposits and the prohibition of forced bundling sales will be detailed, and banks will be encouraged to carry out credit reviews in advance; Banks clarify their own charging issues, strengthen the management of third-party institutions, and assess the charging situation of cooperative institutions; in the credit enhancement link, banks are required to reasonably introduce credit enhancement arrangements from three perspectives: independent bank commitment, corporate and bank joint commitment, and independent corporate commitment In the assessment process, the bank's capital pricing management, credit rating, and provision of funds and other factors that affect financing costs are required, and performance evaluation is required to eliminate inappropriate incentives. At the same time, the "Notice" requires that the management of financing charges be improved, internal control and audit supervision be strengthened, and that joint efforts and positive incentives for cross-departmental supervision be required.
Tao Jin, a senior researcher at Suning Financial Research Institute, said in an interview with a “Securities Daily” reporter that this year’s “Government Work Report” clearly emphasized that “maintaining market players” “resolutely rectifying illegal charges involving enterprises” “must allow small and medium-sized enterprises to make loans. The availability is significantly improved, and the cost of comprehensive financing must be significantly reduced." The six departments jointly released relevant regulatory measures in a timely manner, gradually elaborating the above requirements, with the aim of guiding credit funds into enterprises to the greatest extent, reducing the implementation of enterprise operating and financing costs, and achieving a significant reduction in the overall financing cost of enterprises. Effectively alleviate the financing difficulties of enterprises, especially small and micro enterprises.
The Banking Industry Operation Report for the first quarter of 2020 recently released by the National Finance and Development Laboratory shows that the overall net interest margin of commercial banks at the end of March 2020 was 2.1%, a decrease of 10BP from the end of last year, reaching a new low in the past two years. With the continuous narrowing of the bank's net interest margin, will the issuance of the "Notice" further affect the bank's profitability?
"Under the condition of constant cost and declining net interest margin, the issuance of the "Notice" will standardize the bank's credit charge standards, guide banks to reduce credit pricing and related commission fees and commission income, so that the bank's net profit will further decline "Xu Chengyuan, the chief financial analyst of Dongfang Jincheng, told a reporter from Securities Daily.
Xu Chengyuan suggested that banks should optimize the structure of credit assets, increase loans for SMEs and credit cards, etc., should also optimize the debt structure and reduce the comprehensive cost of liabilities, and at the same time optimize the bond investment structure and increase the efficiency of capital use to increase capital business income.
Tao Jin believes that banks need to actively adapt to the policy environment, actively explore other businesses, increase non-interest income, and provide more comprehensive services to enterprises. (Securities Daily)