Study On International Competitiveness Of ASEAN-5's Banking Industry

With the rapid development of finance globalization, competition in global banking industry becomes more and more severe. Under this background, the international competitiveness in banking industry turns to be an important factor to evaluate one country's competitiveness as its great role in National Economy. Currently, foreign banks have been pumped into Chinese market, competing with local banks to grasp market shares. Therefore, when Chinese financial market opened fully to foreign banks as the promise made since the entry of WTO, Chinese banking industry will inevitably face a more intense competition situation. How can local banks survive in this fierce market? How to improve their international competitiveness? These issues are indispensable and meaningful for analysts.Singapore, Malaysia, Thailand, Indonesia and Philippine, as the neighbor of China, are developing countries with similar banking system. It is significant and useful to analyze the international competitiveness in these ASEAN-5's banking industry, finding out the essential factors of holding and improving bank competitiveness, which may assist our banking industry to upgrade its competitiveness.Based on the appraisal system, this paper attempts to evaluate the competitive advantages and disadvantages in ASEAN-5's banking industry, analyzing their potential influence and summarizing their experience for our reference so as to improve our competitiveness.Through the analysis, the main points have been made as follow:1. Banking industry is an important sector in ASEAN-5's national economy, whose international competitiveness is the essential constitution of the national competitiveness. When appraising its competitiveness, we should have a comprehensive view, not only from the current condition based on a fixed period, but also from the potential institutional factors, such as organizational structure, risk management mechanism and operational strategies, etc.2. No matter in developed countries or developing countries, capital assets ratio, profits growth ratio and cost/ income ratio are the key factors affecting the international competitiveness of banking industry. Compared to developed countries, ASEAN-5's banking industry have relatively weak current competitiveness whenconsidering the profit ratios, assets ratios and cost ratios.3. In terms of banking industry in ASEAN-5, Singapore's banks keep a moderate growing trend while Indonesia owned banks develop sharply, along with relatively weak ability on persistence. On contrary, banks in Thailand have strong developing capability when Malaysia's banks perform well in profit earning. Overall, Philippine's bank was weak in this aspect.4. In general, the potential competitiveness in ASEAN-5's banking industry still lag behind their rivals in developed countries. Among them, Singapore has the strongest ability on long-term competitiveness, attributing to the high level management on organization structure, risk control and multinational strategies. Malaysia's banks are proud of their reasonable organizational structure, earning good effects of corporate governance. Thailand owned banks still need to improve the ability of risk control and oversea operation, although they are strengthening institutional construction. And banking industry in Philippine and Indonesia are relatively weak to hold potential competitiveness.