There are three main differences between intermediary business and off-balance sheet business in terms of nature, business content and risks.

1. The essence of the two is different:

The essence of intermediary business: refers to the general term for the business of commercial banks collecting payment fees and other entrusted matters for customers.

The essence of off-balance sheet business: refers to the business activities of commercial banks that are not included in the balance sheet in accordance with the current accounting standards and do not affect the total assets and liabilities, but can affect the current profit and loss of the enterprise. and changes in bank asset returns.

2. Different business contents:

Business contents of intermediary business: In the remittance business, the customer transfers cash to the bank, and the bank transfers the cash to a third party in a different place. In the collection business, banks collect various payments on behalf of customers and accept commissions from customers for buying and selling securities, precious metals and foreign exchange. Trust business, banks manage property on their behalf, transfer inheritance, and keep securities, valuables, etc.

The business content of off-balance sheet business: trust consulting services. Payment settlement. Loan-related services, such as lending institutions, loan approval, syndicated loan agency, agency services, trade reports, export insurance and other import and export businesses.

3. Different risks:

Intermediary business risks:

Most intermediary businesses do not require corresponding capital reserves, resulting in some commercial banks entrusting and The excessive expansion of intermediary business has brought certain potential risks to commercial banks. Due to the role of high leverage, huge profits and losses may occur in trading financial derivatives.

Intermediary business involves many links. The bank's credit, capital, accounting and computer departments are all related to it. It is difficult to prevent risks and clarify responsibilities. Intermediary business is mainly not reflected in the balance sheet. Many businesses cannot truly reflect this in their financial statements. It is difficult for external users of financial statements, such as shareholders, creditors and financial regulatory agencies, to understand their entire business scope and evaluate their operating results. The decline in operational transparency affects the market's influence on banks.

Off-balance sheet business risks:

In a guarantee, if the guarantor is unable to fulfill its debts due to bankruptcy, the bank will bear the responsibility as the guarantor. Due to changes in market conditions, banks' guarantees to customers become allocations of the bank's physical assets. In options, futures and exchange trading, banks' risks are more uncertain.

Baidu Encyclopedia—Bank Intermediary Business

Baidu Encyclopedia—Off-balance sheet business