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China: Insurance and Banking Sectors Continue to Enhance Financial Services Q1 2024

According to recent stats from the National Financial Regulatory Administration in Beijing, total assets of the insurance companies amounted to RMB 32.9 trillion, up by RMB 1.4 trillion or 10.4% from the beginning of the year 2024.

Banking and insurance assets increased steadily

As of the end of 2024 Q1, total assets of the insurance companies amounted to RMB 32.9 trillion, up by RMB 1.4 trillion or 10.4% from the beginning of the year. Among those, assets of property and casualty insurance companies registered RMB 2.9 trillion, up by 4.4%; assets of personal insurance companies reached RMB 28.6 trillion, up by 4.4%; assets of reinsurance companies recorded RMB 775.1 billion, up by 3.8%; assets of insurance asset management companies were RMB 120.9 billion, up by 14.9%

As of the end of 2024 Q1, the total RMB and foreign currency assets of China’s banking institutions at home and abroad reached RMB 429.6 trillion, up by 8.1% year on year. Among those, assets of large commercial banks registered RMB 185 trillion, up by 11.2% year on year, and accounting for 43.1% of the total. Assets of joint-stock commercial banks reached RMB 71.8 trillion, up by 4.1% year on year, and accounting for 16.7% of the total..

The banking and insurance sectors continued to enhance financial services

As of the end of 2024 Q1, the outstanding balance of loans to micro and small enterprises (“MSEs”, including MSE loans, and loans to individual business owners and MSE owners) reached RMB 74.4 trillion. The outstanding balance of inclusive loans to MSEs with single account credit limit not exceeding RMB 10 million reached RMB 31.4 trillion, up by 21.1% year on year.

By the end of 2024 Q1, insurance companies had recorded primary insurance premium income of RMB 2.2 trillion, up by 5.1% year on year. Insurance claim and benefit payments reached RMB 735.2 billion, up by 47.8% year on year. The number of new insurance policies was 20.6 billion, up by 30.1% year on year.

Asset quality of commercial banks kept basically stable

As of the end of 2024 Q1, outstanding balance of NPLs of commercial banks (legal entity, the same below) was RMB 3.4 trillion, up by RMB141.4 billion from the end of the previous quarter. The NPL ratio of commercial banks was 1.59%, remain basically unchanged compared with the end of the previous quarter.

As of the end of 2024 Q1, outstanding balance of performing loans of commercial banks was RMB 208.2 trillion, among which the balance of normal loans was RMB 203.6 trillion and the balance of special-mention loans was RMB 4.6 trillion.

Commercial banks remained resilient against risks 

By the end of 2024 Q1, commercial banks had accumulated net profit of RMB 672.3 billion, up by 0.7% year on year. The average ROE of commercial banks was 9.57%, up by 0.63 percentage points compared with the end of last quarter. The average ROA was 0.74%, up by 0.04 percentage points compared with the end of last quarter.

As of the end of 2024 Q1, the balance of loan loss provisions of commercial banks was RMB 6.9 trillion, RMB 269.8 billion higher compared with the end of last quarter. The provision coverage ratio was 204.54%, down by 0.6 percentage points compared with the end of last quarter. The loan provision ratio was 3.26%, down by 0.01 percentage points compared with the end of last quarter.

As of the end of 2024 Q1, the capital adequacy ratio (CAR) of commercial banks (excluding foreign bank branches) was 15.43%, tier-1 CAR was 12.35%, and core tier-1 CAR was 10.77%.

Liquidity status of commercial banks remained sound

As of the end of 2024 Q1, the liquidity coverage ratio of commercial banks was 150.84%, down by 0.76 percentage points compared with the end of last quarter; net stable funding ratio was 125.33%; liquidity ratio was 68.66%, up by 0.78 percentage points compared with the end of last quarter; the RMB excess reserve ratio was 1.7%, down by 0.54 percentage points compared with the end of last quarter; and the loan-to-deposit ratio (domestic loans and deposits denominated in RMB) was 78.8%, up by 0.11 percentage points compared with the end of last quarter.

Solvency status of the insurance sector remained adequate and stable

As of the end of 2024 Q1, the comprehensive solvency ratio of the insurance sector was 195.6%, and the core solvency ratio was 130.3%. The comprehensive solvency ratios of property and casualty insurance companies, personal insurance companies and reinsurance companies were respectively 234.1%, 186.2% and 264.4%, and the core solvency ratios are respectively 206.3%, 113.5% and 229.1%.

Appendix:

  1. Total assets and liabilities of the banking sector in 2024 (quarterly)

http://www.nfra.gov.cn/cn/view/pages/ItemDetail.html?docId=1164264&itemId=954

  1. Table on main supervisory indicators of commercial banks in 2024 (quarterly)

http://www.nfra.gov.cn/cn/view/pages/ItemDetail.html?docId=1164263&itemId=954

  1. Table on main indicators of commercial banks in 2024 (by types of institutions, quarterly)

http://www.nfra.gov.cn/cn/view/pages/ItemDetail.html?docId=1164262&itemId=954

  1. Table on inclusive loans to MSEs by banking institutions in 2024 (quarterly)

http://www.nfra.gov.cn/cn/view/pages/ItemDetail.html?docId=1164261&itemId=954

  1. Table on solvency status of the insurance sector in 2024 (quarterly)

http://www.nfra.gov.cn/cn/view/pages/ItemDetail.html?docId=1164249&itemId=954

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