Banking's long road
(China Daily)
Updated: 2006-10-24 09:39 However, the dazzling victory in stock market debuts is just the end of the
beginning for the banks' transformation from lenders tightly controlled by the
State to genuinely competitive institutions standing on their own feet.
It is an open secret that part of the reason behind investors' enthusiasm for
the Chinese banks is the Chinese economy's rosy prospects and State backing for
the banks.
As for capabilities in providing quality service and managing risks, which
should be central to the competitiveness of any financial institution, the State
banks still have a long march.
While the State's support can be a strength for the banks, it also has its
downside. Currently, the top leaders of the banks remain government appointees,
and human resources management still largely follows that in government
agencies. Such arrangements, in many cases, can hinder the construction of a
business-oriented management structure.
In addition, the banks' newly reshuffled executive boards also face the
challenge of building more sound decision-making processes and making full use
of the wisdom and experience of board members and independent board
directors.
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