The banking industry is a sub industry of the strong cyclical industry financial industry. The banking industry is special. It can be said that it is the mother of all industries. In the current economy, the banking industry plays an irreplaceable role. The banking industry can be said to be the lifeblood of the national economy. So how should the banking industry invest? Let's learn together.
The bank's business model is mainly divided into two types: two incomes and two expenses. If the bank collects money from depositors at the interest rate of 3%, and then lends it to enterprises at the interest rate of 6%.
Two incomes include:
1. Interest income: 6% loan interest paid by the enterprise to the bank;
2. Non interest income: the bank charges management fees and service fees for loans and deposits.
The two fees include:
1. Interest expense: 3% deposit interest paid by the bank to the depositor;
2. Risk reserve: The bank loans to customers. If the customer fails to pay, the bank has to take part of its own income to cover the deficit.
So to sum up, the bank's profits are:
银行盈利=两个收入-两个费用
银行盈利=利息收入+非利息收入-利息费用-风险准备金
银行盈利=利差收益+非利息收入-风险准备金
The difference between interest income and interest expense is also called interest spread income. At present, the interest spread income of domestic banks contributes most of the profits.
The cyclical nature of banks is greatly affected by the macro-economy because of their economic model.
When the economy is in a downward cycle: the quality of customer repayment declines and the risk reserve increases; At the same time, the country has cut interest rates to stimulate the economy, and the bank interest margin income has decreased, so the bank profits have decreased.
When the economy is in an upward cycle: the customer's repayment quality is high, the risk reserve is reduced, and the country cools the economy by raising interest rates, so the bank's profit will increase.
Because the economy will show cyclical changes, the profitability of the banking industry will also change with the change of the economic cycle. However, on the whole, if a country's economic growth is faster, the profitability of the banking industry will be better.
At present, there are many domestic banking index funds, but there are only a few except index funds with a scale of less than 100 million. These index funds track the index of China Securities Bank. The China Securities Bank Index selects the bank stocks in Shanghai Stock Exchange and Shenzhen Stock Exchange.
