Banking News
- BCG: Chinese mainland banks seen as global challengers
Date: 25-Apr-2007 Sources: (Xinhua Online)
Chinese mainland banks will become global challengers, according to an annual report on banking issued by the Boston Consulting Group (BCG) on Tuesday.
'China's banking industry has great potential,' said Tjun Tang, vice president and director of BCG's Beijing office, one of the authors of the report.
'Some of the banks will challenge their western rivals in the next five to ten years,' he said.
Three mainland banks already rank among the world's top ten in terms of market capitalization, according to a top 100 bank list included in the report.
The Industry and Commercial Bank of China (ICBC) ranks second after Citibank. The ICBC raised 21.9 billion U.S. dollars in its initial public offering (IPO) last year, the world's biggest-ever IPO.
The Bank of China and China Construction Bank rank sixth and seventh respectively in the list.
Chinese banks have also been improving their competitiveness, giving shareholders juicy returns, according to the report.
'Chinese banks will continue to grow revenues by an annual 8.5 percent until 2015', said Tang adding that China will become the world's third largest banking market, after the U.S. and Europe.
Tang also pointed out that developing markets were prone to bigger fluctuations. 'If investors lose confidence in the market, the valuation of these banks could change very quickly.'
The report also shows that the market capitalization of the global banking industry has risen 25.5 percent to 8.1 trillion U.S. dollars, a record high.
The BCG Monday set up the China Banking Institute, aiming to promote the development of the nation's banking sector and maintain banks' competitiveness.
The report is based on 608 major banks worldwide, accounting for more than 83 percent of the total market value of the global banking sector.
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