In recent years, reform and innovation of China banking have obtained remarkable achievements. The whole banking changes historically, plays the supporting and promoting role in the economic society development, and strongly supports China national economy to develop well and rapidly. 

HongKongBankOfChina

        Banking is in the subject position of China financial industry. According to the character and function, China banks could be divided into three kinds: Central bank, Commercial bank and Policy bank.
　　In 2005, total capital amount of domestic local and foreign currency in the financial institutions of China banking was to 35.96 trillion yuan, increased year-on-year 19.3%. Total assets amount of state-owned commercial banks was to 19.15 trillion yuan, increased 17.5%; total assets amount of joint-stock commerical banks was to 5.49 trillion yuan, increased 24.4%; total assets amount of urban commercial banks was to 1.88 trillion yuan, increased 19.9%; total assets amount of other financial institutions was 9.44 trillion yuan, increased 20%. Total debt amount of domestic local and foreign currency of the financial institutions was 34.46 trillion yuan, increased year-on-year 18.7%; Of which, total debt amount of state-owned commercial banks was 18.37 trillion yuan, increased 17.4%; total debt amount of joint-stock commercial banks was 5.29 trillion yuan, increased 24.2%; total debt amount of urban commercial banks was 1.81 trillion yuan, increased 19.6%; total debt amount of other financial institutions was 8.99 trillion yuan , increased 18.3%.
　　In 2006, asset scale of China banking grew rapidly, asset quality was perfected constantly, profitability was improved stably. Profit before tax of main commercial banks was 240.9 billion yuan, increased by 55.9 billion yuan than that in 2005, increased 30.2%, net return on total assets and net return on equity of four state-owned joint-stock commercial banks were to 0.9% and 14.9% averagely, intermediary business revenue of main commercial banks accounted for 17.5% and revenue structure changed further. Of which, profit before tax of state-owned commercial banks was 197.49 billion yuan, joint-stock commercial banks fellow closely, was 43.42 billion yuan. The next was policy bank 31.1 billion yuan, rural credit cooperatives and urban commercial banks fellow 18.62 billion yuan and 18.09 billion yuan respectively.

　　By the end of 2006, total assets amount of financial institutions of China banking was to 43.95 trillion yuan, profit before tax was 337.92 billion yuan, increased about 10 times of that in 2003 when China Banking Regulatory Commission established.
　　The research proves that bank businesses, including commercial bank business and investment bank business, are all with high benefit, the main cost is management cost. Calculating on 3% interest margin, only the loan item automatically adds 800-900 billion yuan to the profit of domestic bank annually. Under normal circumstances, banking is definitely the most lucrative industry. Capital expansion multiple of domestic banks is between 20-40, profit rate of total asset is 0.1-0.9% ( average 0.5% around), asset utilization rate is about 2-4%, domestic banks have high potential in improving self-quality and operational management efficiency.
　　In the future, China banking has great potential to promote profitability, it is not only because of the huge market development space existing in domestic banking, also because of the high potential to enhance the overall operation quality of domestic banking.

　　Since the reform and opening up, state-owned commercial bank businesses cross and form omnibearing competition status step by step, and such competition driving by commercialization and hunting for profit becomes more and more fierce especially in the developed regions. Compared with international standard and successful foreign commercial banks, the four China commercial banks are still infant, low efficiency and not the commercial bank in a real sense, the competition among the banks haven’t gone out of the low-level competition pattern in which each goes his own way.