Since the news that the head of the firm is subject to a reduction in salary, bank salaries have been the focus of attention. Weekend news: according to a journalist survey, most bank employees earn mainly on merit bonuses, and commercial bank executives generally have hidden benefits and do not lose pay earnings。
In the past 2013, 16 listed banks in unit a paid a total of $480 million to management. A fixed portion of the remuneration of executives is published in the annual newspaper of the five branches of construction and agriculture, with an average of $1. 0373 million for the chairman. This figure should be conservative, but it also far exceeds the income levels of many middle- and lower-class workers, and is nearly 50 per cent higher than the average annual salary of 720,000 directors of other national enterprises。
Of course, the hidden benefits of the financial system's executives, which are high in income and even far above income levels, are no longer secret. In addition to the “face-to-face” wage bonus, a number of banks generally maintain “job consumption” in the form of a special allowance for the president, reimbursement of the purchase of a card, etc., and do not lose remuneration income. In an audit, a stock bank was even identified with false invoices amounting to nearly $60 million, and cash withdrawals were mostly used to provide “hidden benefits” such as bonuses。
Why does the financial sector have such high benefits? It's just the industry that makes so much money。
According to the latest published stock a, 16 listed banks made a total of $684. 9 billion, well above the net gains of an additional 2521 non-financial listed companies. This is not the first time that this has happened. One can see that 80 per cent of china’s current banking sector is based on spreads, which the central bank sets at 3 to 3. 5 per cent. But in practice, this can only be enjoyed by local governments and corporations. Most private enterprises have a low interest rate of 6-7 per cent。
This margin income is simply an exaggeration compared to abroad. This has led our banks not to contribute too much to the growth of the real economy, but to the transfer of social wealth between one and the other. The real economy was the main source of the social profit-making wealth cake, but our bank spreads have made banks an exploiter of the “residual value” of the real economy。
That is why the same spreads, in places such as the united states and hong kong, are strictly controlled below 0. 5 per cent. And our banks dared to use such a huge and unjustified margin income as the main source of income。
These banks in developed regions have small spreads and interbank services. And our bank, what is it? These are rough numbers, such as who pulls more deposits, who sells more property and who receives more customers. And that led to the very nature of our banks: crazy deposits, crazy lending, and, anyway, stable interest rates. How many banks are trying to serve the people
Why are our banks so cool around the world
The reason is simple — these banks have their roots. In order to borrow money, enterprises can only resort to state-owned banks, which are the only ones that can obtain it. In the case of commercial banks, although they also enjoy high profits, they are not comfortable at all — first, to lend money to local governments to support local GDP development; second, to buy land and build real estate; and lastly, to introduce low interest rates to guarantee a low rate of return on public debt。
Banks with institutional government backgrounds trade in spreads in the form of usury. The only result of this trade is the slow loss of productive incentives for real economic enterprises and their gradual decline, which in turn has led to a decline in bank profits。
This expectation is not far-reaching - 5 of the 16 listed banks in the first half of this year have seen their net profit increase fall to a single digit, with a minimum of 5. 59 per cent, followed by 6. 22 per cent of the bank, 7. 05 per cent of the bank, 8. 06 per cent of the bank and 9. 15 per cent of the bank. During the same period last year, this figure was maintained at more than 10 per cent。
Institutional constraints limit the development of own businesses, and the pro-son model within the system gives rise to deformed forms of development. As the real economy slid and commercial bank profits shrunk, banks entered a vicious circle with the real economy — the former not abandoning the spreads, and the latter carrying only high spreads. That is why it is clear that the share of negative bank assets is rising rapidly. At the same time, the financial model of the internet, which emphasizes service and user experience, is a quick hit。
For china, institutions and economies have been inextricably linked. It appears that, during the economic downturn, the centre was not idle in its focus on institutional reform。
Ultimately, to reverse the profitability of state enterprises and the fragmentation of finance on the real economy, it is necessary to reform its business model, which is the crux of institutional factors behind it。
Responsible editor: zhang dei
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