Banking Industry

©2005 Monetary Authority of Macao Market Structure and Business growth schema of the Banking Sector Lao Kam Chio Abstract The Macao financial grocery store has a comparatively simple structure. The banking sector plays a dominant role whose sombreness and boom is largely driven by the interaction of several(prenominal) factors, namely interchanges in demand for bank finance, regional stinting cycle and supervisory environment. Market structure assessment helps to disclose information such as the potential and limitation of the financial industry, which helps to map out strategy geared to future market phylogeny. This paper attempts to carry out a basic lease of the banking sector through the application of theories relating to market structure. It will similarly recommend several strategies conducive to improving or enhancing surgical swear out of the banking sector. - 15 - Market Structure and Business Development Strategy of the Banking Sector 1. An Overview of the Performance of the Banking Sector A statistical study of the banking surgery shows that during the past decade the sector has experienced a process characterised by profitability deterioration to recuperation.

The situation is particularly clear in the early 1990s when the Mainland government implemented a series of austerity measures, resulting in massive early reckon of investment in Macaos property sector. Many development projects were put to halt or disrupted due to pretermit of capital. Consequently, loans extended by the banking sector could not be repaid, jumper cable to a huge accumulation of non-performing loans. Chart 1 illustrates the change in profitability of the Macao banking sector during the past 10 years. From 1995 to 2004, lend was sluggish and this was generally understood to be the result of non-performing loans arising from reasons mentioned above. Accordingly, the banks became more(prenominal) prudent and in some cases, overly stringent on credit assessment. impaired. To offset stagnation in traditional... If you want to endure a full essay, order it on our website: Ordercustompaper.com

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