The Performance Of State-owned Commercial Banks

The four state owned commercial banks (the Four Bigs), ICBC, ABC, BOC and CCC hold key positions in China' s economy and finance areas. At the end of 2002, the four banks had total assets of Y14, 45 trillion, 141% of the year' s GDP, while their non performing loans (according to five grades standard) reached ?077 billion, 20. 3% of the year' s GDP. In the finance field, the total assets of the four banks took 62. 6% of the total finance field' s total assets in China. In bank industry, the four banks also held dominant positions. By the end of year 2002. the four banks took 77.7% and 78.7% of the deposit and loans markets. And also, the non performing loans rate for the four banks is 26.12%.Now China' s economy develops fast, and the four banks' influence on China' s economy is also decisive. The reform of the four banks determine whether China' s economy can develop healthily. And before we go to the reform, we must take a look at the four banks' operation situation.The author of the paper thinks that due to the implicit national credit, and because of their special positions in China' s economy and finance fields, the bankruptcy risks of the four banks are almost zero. So, the first chapter of the paper concentrates on the analysis of profit index. And the result shows that, compared with foreign banks, the four banks' profit index are low.The second chapter analyzed the reason why the four banks operate with low efficiency. The industrial policies since the founding of the country and the functions of the four banks determine that they have inherent shortcomings, and the low efficiency management levels of those operators of the four banks just made things worse.According to those problems appeared in the second chapter, the third chapter presented the author' s suggestions as to how to solve these problems.