# How long does the bank rebound? By [GrantCorey](https://paragraph.com/@grantcorey) · 2023-06-14 --- Column of the Editor-in-Chief of Arts/Furthers (Bkopleader) Do it be possible to determine the size, net divide and negative ratio of the bank’s profit-generating lending in the future to sustain the continued growth of bank plates? Should the bank unit be rebuilt or David? Is there any profit to buy into the Banking Unit? The medium- and long-term funds released by this round have effectively reduced the combined cost of bank liabilities, which has declined more than the lower interest rate of the purchase price, and the overall net interest rate of the three-quarters marketed banks has expanded from 1.97 per cent in the second quarter to 2.77 per cent, a small expansion from 2.055 per cent in the last three quarters. At the same time, the net profits of the 16 listed banks (excluding banks that are listed after 2017) are increased by step by step, with 5.2 per cent, 6.6 per cent and 7.2 per cent in the first, second and third quarters respectively. In addition, the last round of local government debt swaps to bonds has been completed, reducing the overall risk premium for banks, improving the quality of assets in the form of poor stock-outs, and showing signs of improved write-off pressure and negative yield rates. However, will it be possible to determine the size, net interest and negative rates of the bank’s profit-increased loans in the future to sustain the continued movement of bank plates? Should the bank unit be rebuilt or David? Is there any profit to buy into the Banking Unit? First of all, the net divide in the current round improved to a high level, with the possibility of a continued expansion of net interest in the future without a rise in interest. The net interest margin of the bank is essentially determined by the central bank’s base interest rate, which is generally tightly currency-intensive when the central bank increases the base interest rate, which means that, although the bank’s liability end cost increases, the asset-end cost increases are higher, corresponding to the expansion of the bank’s net interest rate. Historically, the overall net divide in the banking sector (average) and the base interest rate of the central bank were highly developed, with limited expansion of the bank’s net interest margin under the fixed-rate maintenance rate. On the other hand, in the case of the current overall net divide in the banking sector, the current exchange rate of 2.07 per cent has reached the limit, and future banks will need to continue to increase the size of their assets on a continuous basis in order to continue to achieve an increase in profitability. The three-quarters net divide in the banking sector is due to a significant reduction in the cost of the same-sector liability, particularly in the second half of 2017 for equity-based banks with high levels of dependency. The average net interest rate of the equity bank in the first three quarters of 2017 was 2.16 per cent, while the report for 2017 showed a decline in the average net interest rate to 1.956 per cent, which meant that the net interest rate of the four-quarters equity bank was significantly narrowed to the full year net divide. The improvement in the performance of the current round of equity banks is therefore most significant. In the case of the “best-of-business” Bank, the share of its share of liabilities (including shares) remains high, at 40.2 per cent, has benefited from lower currency market interest rates, the cost of the same-sector liability has recovered at an early stage, with an increase from 1.78 per cent reported in mid-2018 to 2.09 per cent, resulting in a substantial improvement in the three-monthly earnings of the Bank. There is a stronger negative correlation between net profit growth and interbank interest rates starting in 2015. In contrast, the net divide of 2.27 per cent in the first three quarters of 2017 for the Bank is also extremely high in the current cycle, with limited expansion of space in the short-term net interest spread of the Bank. Second, the speed of the expansion of bank assets and the M2 increase are highly relevant, with the opening of an out-of-balance business contract for banks under financial leverage, which is subject to capital deposits and the MA Cauca nuclear constraints that cannot complete the non-marking operations. Owing to the weak growth of deposits, the balance of bank deposits in September remained low at the same rate (8.5 per cent), the expansion of assets within and outside bank statements was constrained, and financial stability, lower economic risk preferences were at the heart of the balance sheet expansion that constrains the banking sector. The growth rate of the four main banks’ assets is clearly higher than that of the equity bank, which has increased by 9.44 per cent and 8.5 per cent respectively, while the capital adequacy rate is 14.8 per cent and 15 per cent, respectively, while the equity bank continues to precipitate a broad share of the liabilities, with the highest rate of growth of the Bank for Peace and Security, with an increase of 8.1 per cent and 6.8 per cent, with a capital adequacy rate of 12.69 per cent and 11.7 per cent, respectively. As large commercial banks have more retail outlets, their stable low-liability sources are important support for their expansion of their liabilities, while equity banks are subject to non-targeted continuing compression and the recognition of liabilities by their peers at the end of their liabilities, and their asset-liability expansion is limited. Finally, the downward pressure on PPI increased and the banking sector continued to face bad bank pressure in 2019. The continuing increase in non-performing loans would result in double pressure on net gains and valuations in banks, while the continuing increase in poor lending would increase bank write-offs, increase the allocation of funds and erode bank profits, and pressure the overall valuation of the banking sector. Historically, poor loans have a strong negative relationship with increases and PPI, reflecting the procyclical nature of the banking sector. Owing to the sharp increase in the prices of industrial goods benefiting from supply-side reforms, the banking sector has experienced a sharp decline, but the marginal effects of the current high prices of industrial goods and supply-side reforms have diminished, industrial prices will continue to slow down in 2019, and the sustainability of the industry’s profit-generating growth has declined, although it will not be possible to convert to poor loans in the short term, but will put pressure on bank valuations. According to different banks, State-owned banks are the banks that have benefited most from this round of supply-side reforms, but it cannot be overlooked that China’s enterprise sector leverage has been ranked among the world’s top, reporting by the Central Bank that high leverage and local hidden debt of State-owned enterprises remains the source of future Chinese financial risk. According to the Central Bank’s Financial Stability Report 2018, the corporate sector leveraged 16.6 per cent at the end of 2017, of which State-owned enterprises had a high leverage rate, with an average asset liability rate of 60.4 per cent for industrial enterprises of more than the size of the country and 4.9 per cent for industrial enterprises above the full scale, and measures must be taken to effectively guard against and mitigate the debt risks of State-owned enterprises. The Bank also cites, for example, X, a more visible debt surplus of 80 per cent. Invisible debt is growing faster, larger in size, with a greater risk of debt overhang and a security chain risk. Short-term equity banks remain the highest performers, and their overall valuation is at the historical bottom (PB reached 0.81) at the end of June 2018, by the end of June 2018. --- *Originally published on [GrantCorey](https://paragraph.com/@grantcorey/how-long-does-the-bank-rebound)*