Source: The Beijing News, ChinaScope
Financial (Data)
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China’s Central Bank has required banks to cut
bank card transaction fees starting from February 25, 2013. The bank card
transaction fees for retailers in food & beverage and entertainment
industries may be cut by 37.5 percent, while that for other retailers may be
reduced by 22 to 24 percent. As a result, China’s four major state-owned banks
may lose CNY 6 billion a year from lost card transaction revenue.
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Industry insiders said that currently, bank
card fees primarily consist of transaction fees and annual fees, with the
former accounting for a larger share.
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Earlier semiannual reports show that
Industrial and Commercial Bank of China (1398: HKG: 601398: SHA), Bank of China
(3988: HKG; 601988: SHA), Agricultural Bank of China (1288: HKG; 601288: SHA),
and China Construction Bank (0939: HKG; 601939: SHA) pulled in a combined CNY
30.04 billion from bank card fees in 12H1, of which about CNY 15 billion were
derived from bank card transaction fees.
Lower card fees might be an attempt by the government to stimulate domestic consumption. Fee income accounts for an increasing share of banks’ operating income, and the lower card fees are therefore, together with Interest rate cuts, threatening to erode bank profitability.
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