CMBC Launches the Process Bank Reform

2007-9-4

According to CMBC Mid-year Report, by the end of the reporting period, it has a small gap between the total amounts of corporate current savings and the timed deposits, which are respectively 217 billion and 282.3 billion yuan with the average annual interests at 0.89% and 2.87%. However the amount of the timed deposits is far greater than the current savings, which are respectively 65 billion and 28.1 billion yuan with the average annual interests at 0.70% and 2.11%.

We have the reasons to believe that if in the latter half of the year CMBC is unable to attempt to change the term structure of the deposit and increase the low-cost debts, the net profit of the bank will be adversely affected. At the same time “the further intensified competition in the business of financial management and private loans among the banks” has become one of the major difficulties in the operation of CMBC.

For this CMBC officials said that the bank will establish the Department of Debt Finance to improve the management of debts. Meanwhile, the initiative debt tools will be applied to satisfy the developmental needs of the entire bank, push the growth in inter-bank deposits to support the business development and reasonably adjust the system interest rate for guiding the capital to be deployed effectively and properly.

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