The low interest rate of banks reduces the marginal profit of bank funds, which makes the deposit-loan spread of banks shrink continuously. In this case, the profit space of commercial banks is very limited, so we must adapt to the changes in the market environment to explore various non-interest businesses and find new profit growth points.
2. Resolve non-performing loans and reduce financial risks.
Judging from the quality of bank credit assets, the average NPL ratio of the top 20 banks in the world is only 3.27%, among which the NPL ratios of Citibank and Bank of America are 1.4% and 0.85% respectively. This requires the use of off-balance sheet business to prevent and resolve financial risks.
3. Reduce operating costs and improve return on assets.
With the increase of bank costs and the decrease of bank income, it is difficult for simple traditional business to meet the multi-level and diversified financial needs of customers and the guarantee of bank income. State-owned commercial banks have too many branches and too many employees, so they must reduce their operating costs. If you want to provide customers with multi-functional, diversified and international services without increasing or reducing operating costs, it is an ideal choice with low cost of off-balance sheet business and high return on assets.
4. Use off-balance-sheet financing technology to increase sources of funds.
With the continuous improvement and development of China's financial market, enterprises raise funds from the market and trade stocks and bonds directly with brokers as institutional investors, instead of relying entirely on commercial bank loans. The rapid development of insurance companies, trust companies, securities companies, fund management companies and other non-bank financial institutions has diverted some funds from commercial banks. In order to compete for the source of funds, commercial banks can increase the source of funds by developing off-balance sheet financing technology, such as loan sales and opening standby letters of credit.
5. Improve market competitiveness through business innovation.
The business of commercial banks includes assets, liabilities and off-balance-sheet business. In the process of financial innovation, we should not only pay attention to the on-balance-sheet business, but also pay attention to the development of off-balance-sheet business in order to seize the space and meet the requirements of sustainable development. The expansion of off-balance-sheet business of commercial banks is one of the three development trends of internationalization of banking operation, capital securitization and off-balance-sheet business, which is also conducive to improving market competitiveness.