China Taps a Rich Vein Of Bank Opportunity, But Old Habits Die Hard
The marbled entrance to the Bank of China's "Wealth Management Center" in Shenzhen is a gateway to a world of discount shopping, health-club privileges and VIP airport lounges. Gold-class customers, with $60,000 in deposits, can even expect a birthday surprise.
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"We'll send flowers, or a cake, or make a phone call to show our respect," a blue-uniformed receptionist explains.
But in Shanghai, at a different Bank of China branch, Zhang Zaoyan has pedaled her bike through the rain to spend another half hour pleading through bulletproof glass to slow-moving tellers, trying to explain that a bank clerk incorrectly spelled her mother's name on an application for a savings account. Phone calls and a previous visit have failed to settle the matter. "I'm not a very fussy person," says Ms. Zhang. But, she added, "it isn't satisfying."
Six months after China stepped up efforts to clean up its banking system by bailing out two of its large state-owned banks and preparing them for listings overseas, Chinese officials say -- and foreigners agree -- that the changes appear to be working.
"Things are improving," says Li Ruogu, vice governor of China's central bank, the People's Bank of China. He says internal overhauls are proceeding at the Bank of China and China Construction Bank -- the two banks that are to be listed overseas next year. New boards of directors are in place. Bank headquarters are asserting greater control over local branches to reduce discretionary lending. And Mr. Li says branch managers are on notice: "If you don't follow the rules, you'll be removed."
But it is precisely here on the front lines that China's banks face their biggest challenge: casting aside a culture born of half a century of state planning and reinventing themselves as responsible lenders and purveyors of services to the country's newly rich consumers.
Foreigners say they are often impressed with the level of improvement at Chinese banks, says Chen Xiaolei, head of personal finance at Shanghai Pudong Development Bank, but "perhaps they have lower expectations."
Until just over a decade ago, China's banks operated as government cashiers, pushing out loans to industry under a credit quota; so much for textiles, so much for cement, so much for coal mining. Customers were almost invariably large state-owned companies. It mattered little whether they could repay the loans.
These days, China's Big Four state-owned banks -- Bank of China, China Construction Bank, Industrial and Commercial Bank of China and Agricultural Bank of China -- are organized along lines recognizable to bankers almost anywhere in the world. They maintain separate loan-marketing and approval structures, and have independent auditors. By and large, they funnel money to creditworthy borrowers; many of the least-creditworthy state concerns have been put out of business.
Banks are even saying "no." For instance, Shanghai Pudong Development Bank recently decided that financing the purchase of fleets of cars may be risky, so the bank headquarters put out word that branches shouldn't expose themselves to the sector.
Yet managers are still slaves to big numbers. They are rewarded for increasing the total size of deposits and loans instead of developing new customers. One result: credit still flows to big state companies that can move the numbers quickly while the private sector, the job-creating engine for the economy, is starved of cash.
What's more, bankers are encouraged to play safe. For those brave enough to push innovation, failure can lead to career disaster; success carries few rewards. "For most people in Chinese financial services, the downside risk is more than the upside gain," said David Von Emloh, who runs the China banking practice for management consultants McKinsey & Co.
Faced with competition both from foreign institutions and more-nimble second-tier Chinese banks, the Big Four are scrambling to shore up their deposit base. Those deposits provide them with an inexpensive and abundant source of funds to relend, thus making them the main source of banks' profits. That means keeping rich individual customers -- the kind to whom Bank of China's Wealth Management Center caters to in Shenzhen -- happy. McKinsey research shows that in Shanghai, the top 2% of bank-account holders provide 50% of bank revenue; the next 18% of customers contribute the remainder of revenue; and 80% of accounts -- like the unlucky Ms. Zhang -- are more trouble than they are worth for the banks. (Ms. Zhang eventually got the matter straightened out, but she says it took two visits, phone calls and lost sleep.)
Shenzhen, the booming Chinese metropolis near Hong Kong, points the way to the future. At night, Shenzhen's broad avenues are ablaze in neon advertising 24-hour banking services for all-night partygoers. Banking in Shenzhen has never been easier. Gone are the snarling tellers. Their replacements sport badges such as "High Level Customer Manager." Long lines are being whittled down by telephone and Internet services.
As demand for loans from China's big state-owned companies wanes, McKinsey predicts that in a decade, a third of China's bank profit will come from providing lending and other financial services to individuals. The proportion now is tiny, although it is expanding in leaps and bounds. Mortgage loans more than tripled in the three years to the end of 2003; car loans grew by nine times; and the number of credit cards got six times as big.
But since personal lending is so new in China, there are almost no credit data available. Customer information is stored in different formats around China and can't be exchanged easily within banks. Banks don't have much information on which to base lending decisions, besides self-developed checklists that rely on honest answers from borrowers. Indeed, individual borrowers present some of the biggest challenges because their intentions can be tough to read. Sometimes, says Pudong's Ms. Chen, borrowers "buy a house for investment, not because they live there," which adds a speculative element to loans that makes it difficult for the bank to assess the actual credit risk.
Further, sophistication among some customers is growing too fast for state banks to keep pace. Mark Qiu, chief financial officer of Cnooc Ltd., a major energy group, says his company is funneling transactions through its in-house finance arm, instead of the banks. While bank service levels are rising, he explains, "I can't afford to wait." (See related article.)
But Mr. Qiu believes bank culture is changing. "Before, if you are the bank, you are king," he says. "Now, they come to your office." Bank of China has set up minibranches in Cnooc operations in Shenzhen and Tianjin and is helping with payrolls, while positioning itself to offer oil workers value-added services such as car loans. "This is very powerful. It will provide a competitive advantage, even against a Citibank," says Mr. Qiu.
Still, among other challenges, China's banks remain highly inefficient. Bank of China's earnings per employee in 2003 totaled about US$3,000. That rate is half as high the previous year -- and pales compared with the net income of far-more-diversified Citigroup Inc.'s US$65,090 for each of its 275,000 workers.
And some bankers seem bent on repeating their mistakes. Monuments to the profligate lending of China's banks dot China's landscape In the southern Chinese city of Beihai, the once pristine beach is littered with half-completed and now-abandoned Romanesque and Medieval-style buildings, a legacy of bank-funded projects. But Beihai's scars are apparently no lesson for some financiers. Jieli High Technology Development Co., based in northern China, says banks it won't identify stand ready to pony up some of the US$15 million it wants to build an entertainment pier there in the shape of a giant violin. The instrument's neck would extend over the surf.
To this day, the first loyalty of many bank branches is to their local party branches rather than Beijing headquarters. The state banks have existed in some ways as loose federations of local branches. Imposing centralized discipline, while giving branch managers the autonomy they need to make smart lending decisions, will be a tough challenge.
Complacency may be another cultural brake on change. The government has shown extraordinary generosity and tolerance toward the ailing financial institutions. Starting in 1999, the Big Four handed over $169 billion of nonperforming loans to asset-management companies at full face value. The recovery rate so far: 20 cents on the dollar. Last year, the government dipped into its huge foreign-exchange reserves and injected $45 billion into the Bank of China and China Construction Bank.
Meanwhile, bad-debt ratios at the Big Four are falling, and officially stood at 15.2% at the end of 2003. Yet the absolute figure for bad debt has scarcely budged. The ratio is looking better mainly because bad debts have been diluted by a wave of new lending in the past 18 months. Ultimately, the banks enjoy the full backing of the state, and thus the confidence of depositors. That is one reason -- coupled with restrictions on the number of branches foreign banks can open -- why even when the banking sector is fully opened to competition, they are unlikely to lose too many customers to foreign banks, who now have just 1.4% of banking assets.
Optimists who predict China will pull off a banking overhaul take comfort from the reformers themselves. Beijing has assigned its top talent to the task, led by Liu Mingkang, the urbane English-speaking head of the China Banking Regulatory Commission.
Stephen Harner, who runs his own banking consultancy in Shanghai, describes Mr. Liu as "world class" and his agency "a breath of fresh air." Richard Stanley, Citigroup's top representative in China, sees "tremendous earnestness and intent" to create a commercial banking system. And the banks themselves, he says, are making progress. "I think they're raising their game, they're entering new markets and they're fast learners."
In an effort to shake up management and upgrade skills and technology, regulators are putting a priority on the banks finding strategic foreign partners and then listing in Hong Kong and New York, and possibly on domestic markets, too.
But overhauling an antiquated Chinese state bank would overwhelm the resources of any foreign partner, which would quickly run out of Chinese-speaking trainers, risk-management consultants, auditors and technicians. The Big Four are among the world's largest financial institutions by any measurement. They employ two million staff at 103,000 branches. Besides, a small stake in a huge Chinese bank would give a foreign partner little management say. Citibank, which took a 4.6% stake in Shanghai Pudong Development Bank, has just one seat on the 19-member board.
Nor is it clear that foreign banks are eager to put at risk a large chunk of capital on a financial behemoth with untested management, even if by the time the banks come to the stock market their bad debts will be mostly cleared and they will meet the minimum international capital-adequacy standards of 8%. Single foreign institutions are allowed to take up to 20% of a Chinese bank.
When it comes to change, says Citigroup's Mr. Stanley, Chinese banks will "ultimately have to do it themselves."
中国银行业面临自我挑战
如果你加入中国银行(Bank of China)在深圳的“财富管理中心“(Wealth Management Center)，你就可以享受折扣购物、健身俱乐部的优先资格和机场VIP休息室等多项服务。存款超过6万美元的金卡客户甚至还会在生日当天收到意外惊喜。
一位身穿蓝色制服的前台接待员解释说，“我们将会送鲜花、生日蛋糕或者向我们的客户致电以表达我们的敬意。”
但是在上海的中国银行另外一家分行，张造燕(Zhang Zaoyan，音译)骑著自行车冒雨来到银行，花了半个小时向防弹玻璃后面、动作迟缓的出纳员不断做著解释：一个银行职员错误的输入了储蓄卡申请表上她母亲的名字。她此前曾给银行致电，并来过银行一次，但都没有解决问题。张说，“我不是一个很挑剔的人，但是这里的服务无法令人满意。”
6个月前，中国加快清理银行系统：中国向两大国有商业银行注资，并准备将其上市。现在，中国官员称（外国投资者也赞同），这些举措已经开始发挥作用。
中国人民银行(People's Bank of China)副行长李若谷称，情况正在改善。他说，中国银行和中国建设银行(China Construction Bank)正进行内部改革－－上述两家银行计划明年在海外上市。银行新的董事会已经就位。银行总部对各地分行实施更严格的控制以减少任意放贷。李若谷称，分行管理层得到明确的指示：如果不遵守这些规定，他们将被撤职。
但是，中国的银行当前在信贷方面正面临著最大的挑战：抛弃半个世纪以来计划经济的传统文化，将自己重塑成负责的贷款者和面向中国新兴富有消费者的服务提供商。
上海浦东发展银行(Shanghai Pudong Development Bank)个人金融业务主管陈小蕾(Chen Xiaolei，音译）表示，外国投资者经常说中国银行业的进步给他们留下深刻印象，但是她说，也许他们原本就没有报很高期望。
10多年前，中国银行业仍发挥著政府取款机的功能，银行根据信贷额度向各行业大规模放贷；纺织、水泥和开采煤矿等行业都获得了大量贷款。放贷对象几乎无一例外的都是大型国有企业，他们是否有偿还能力无关紧要。
近来，中国四大国有银行－－中国银行、中国建设银行、中国工商银行和中国农业银行－－都依照国际公认的标准进行了重组。他们继续采用贷审分离的工作架构，并且还有独立的审计师。他们的贷款基本上都发放给信誉良好的借款人；许多信誉等级最低的企业被排斥在贷款名单之外。
银行甚至开始说“不”。比如，上海浦东发展银行最近认为，汽车信贷融资可能具有风险，因为总部下令各分支银行不得涉及此信贷业务。
但是银行领导层仍然将数字放在第一位。他们能获得多少奖励是取决于存贷总规模的增长，而不是有没有发展新的客户。这样造成的一个结果是：信贷仍然流向大型国有企业，因为贷款可以迅速增大数字，而创造就业的私有企业仍然处于对现金的饥渴状态。
此外，银行家被鼓励稳妥操作。对于那些敢于推动革新的银行家而言，失败将给其职业生涯带来灾难性的后果；而成功几乎没有回报。麦肯锡公司(McKinsey & Co.)负责中国银行业管理顾问的David Von Emloh称，对中国金融服务业的大多数人来讲，失败带来的风险高于成功所获得的收益。
中国四大国有银行面临著来自外国机构和本土灵活的二线银行的竞争，四大银行正竭力提高其存款基础。这些存款为他们发放贷款提供了低廉和充足的资金，银行的大部分利润正是由此而来。这意味著银行需要讨好富裕的个人消费者，这正是中国银行在深圳推出的“财富管理中心”所针对的目标客户。麦肯锡研究报告显示，在上海，2%的银行开户人为银行提供了50%的收入；其后18%的客户贡献了其余部分的收入；80%的帐户－－象不幸的张女士这样的客户－－对银行来说带来的麻烦超过了为银行创造的价值。（张女式最终解决了这一问题，但是她说她为此不得不两次来到银行，多次致电，并且还失眠。）
临近香港的繁荣都市深圳为未来指出了一条道路。在夜间，深圳道路两边霓虹灯闪耀，广告牌告诉路人他们可享受24小时银行服务。在深圳，银行业务从未像今天这般容易。出纳员忙做一团的时代已经成为过去。取而代之的是诸如“高级客户经理”等数字工具。由于电话和互联网的应用，排队的人也大大减少。
由于中国大型国有企业对贷款的需求萎缩，麦肯锡预计，在10年后，中国三分之一的银行利润将来自于向个人提供信贷和其他金融服务。目前此类业务的比例仍然微不足道，但正以飞快的速度增长。截至2003年年末的3年，抵押贷款在过去3年增长了两倍还多；汽车贷款增长了9倍；信用卡数量增长了5倍。
但是，由于个人信贷在中国还是一个新事物，这里几乎没有信用资料可用。客户信息以不同的形式分散于各地，使银行之间不能进行便捷的信息交流。除了银行自行设计的主要依靠借款人的诚实填写的资料清单外，银行在作出贷款决定时可参考的依据非常少。其实，个人借款者可能是银行面临的最大问题之一，因为个人借款的动机很难考察。 浦东发展银行的陈小蕾说，有些人贷款买房是用来投资，并不是给自己住，这样就使贷款增加了一些投机因素，使银行很难审查信贷风险。
另外，用户需求日益复杂，让国有银行赶不上步伐。中国海洋石油总公司(Cnooc Ltd.)首席财务长邱子磊(Mark Qiu)表示，中海石油是通过内部财务机构而非银行进行交易融资的。虽然公司使用银行融资有所增加，但他解释道，时间不等人。
邱子磊认为，银行的文化正在转变。他说，银行从前是老大，如今银行也要派人跑企业了。中国银行已经在中海石油在深圳和天津的业务经营地设立了微型银行，处理中海石油在当地的工资发放业务，同时还为该公司职员提供一些增值服务，比如提供购车贷款等。邱子磊说，这样做增强了中国银行的实力，即使与花旗银行(Citibank)相比，中国银行都具有竞争优势。
然而，在其他一些方面中国的银行仍面临很大挑战，比如它们的效率十分低下。中国银行2003年每位雇员的盈利能力只有大约3,000美元，仅为2002年的一半；与产品和服务更加多样化的花旗集团(Citigroup Inc.)更不可同日而语。后者共有275,000位雇员，每人的盈利能力大约是65,090美元。
有些银行似乎总是在重复他们犯过的错误。国有银行的肆意放贷玷污了中国南方城市广西北海的优美景色，曾经质朴天然的海滩，如今留下了一座座罗马式或中世纪风格的烂尾楼。这些都是靠著银行贷款建到中途的项目。但这显然还没有让北海的一些金融业人士得到教训。总部设在北方的Jieli High Technology Development Co.说，一家银行已经表示愿意拿出1,500万美元建设一个巨大的小提琴状的娱乐码头，琴柄伸向大海。该公司不愿意透露到底是哪一家银行。
现如今，银行职员首先是要忠诚于本地的银行机构，而不是北京的总部。中国的国有银行在一定程度上更像是一个松散的地区分支行的联合组织。总行要求地方分支机构执行统一的纪律，赋予地方分支银行行长迅速作出放贷决定所需要的自主决定权，这种做法加大了管理的难度。
自我满足可能是擎肘变革的另一个文化障碍。中国政府对这些问题缠身的金融机构表现了极大的宽容和忍耐。从1999年开始，四大国有商业银行将1,690亿美元的不良资产以帐面价值转移给国有资产管理公司。截至目前，这些不良资产的回收率只有20%。去年，政府又从外汇储备中拿出450亿美元注入中国银行和中国建设银行。
与此同时，四大国有商业银行的坏帐比率也在下降，截至2003年底，官方对外公布的坏帐率为15.2%；但坏帐的绝对数字并没有减少多少。坏帐比率之所以有所下降，其主要的原因是这些银行在过去18个月中又发放了大量贷款。说到底，这些国有银行享受著政府的充分支持，藉此维护著储户的信心。这也是除了限制外资银行在华设立分行的数目以外，中国国有商业银行即便全面开放后依然不会流失大量储户的原因之一。外资银行资产目前只占中国整个银行业资产的1.4%。
持乐观态度的人士预计中国能够成功实现银行重组，中央政府已经派遣以刘明康(Liu Mingkang)为代表的最优秀的人才来承担这项工作。刘明康是中国银行监督管理委员会(China Banking Regulatory Commission)的主席，他外表文质彬彬，讲一口流利的英文。
在上海自营银行业咨询公司的Stephen Harner将刘明康形容为世界级的精英人物，并称他所领导的机构带给中国银行业新鲜的活力。花旗集团中国区首席代表施瑞德(Richard Stanley)认为中国正怀著极大的热情要创造一个商业银行体系。而中国的银行已经在取得进步。施瑞德说，“我认为中国的银行正在不断进步，他们会进入新的市场，他们的学习能力很强”。
为了改组管理层并且提高业务能力和科技水平，中国的银行监管机构侧重于帮助国内银行寻找外资战略合作伙伴，然后将其在香港或纽约上市，有可能的话也在中国内地上市。
但要改组陈旧的中国国有银行，任何一家外资银行的资源都不可能够用，这些外资银行很快发现缺乏懂中文的培训师、风险管理专家、审计师以及技术分析人员等。不管以任何指标来评比，中国的四大国有商业银行都堪称世界上最大的金融机构之列，其雇员总数超过200万，分支机构有103,000家。此外，外资银行在这些银行很小的股权比例使其管理权限很小。比如，花旗银行获得了上海浦东发展银行4.6%的股权，但在19人的董事会上只获得了一个席位。
现在还不清楚外资银行是否会将大量资本投向这些管理能力尚待考察的中国大型金融机构；即便是到这些银行上市之时－－即坏帐大部分处理完毕且已经达到了国际上规定的8%的最低资本金要求，外资银行也不一定就会投入大量资金。单个外资金融机构在一家中国国内银行的持股比例不得超过20%。
谈到变化，花旗集团的施瑞德说，中国国有银行“的变革之路必须自己去走”。
