Smaller players catching up with China’s big four

The big four have seen their share of all local retail deposits slide from 66% in 2004 to 58% in 2011.

While the Chinese still prefer to open accounts in the "Big Four" banks in China, more and more are taking their business to competitor banks in a trend that is becoming more pronounced, according to a study conducted by the consulting firm McKinsey & Co.

The study drew on interviews held with nearly 20,000 residents of 13 Asian countries or regions. Of them, 3,000 lived in nine different Chinese cities.

"We're witnessing a consistent theme across Asia of the desire among consumers for the localization of banks," said Kenny Lam, a partner in McKinsey's Hong Kong office and the leader of the study. "In post-crisis ages, having a global brand may be less of a competitive advantage than before, and domestic players have just as good a chance to compete for customers as the global giants."

The report suggested a significant increase has occurred since the onset of the recent financial downturn in the percentage of respondents who said they "prefer dealing with a local institution".The number in China jumped from 75 percent in 2007 to 87 percent in 2011.

According to the statistics, the most affluent among the respondents were also the most eager to work with local institutions when making investments; about three quarters of the respondents who fall into that group said they favor local institutions.

The Big Four banks the Bank of China Ltd, Industrial and Commercial Bank of China Ltd, China Construction Bank Corp and the Agricultural Bank of China Ltd -have seen their share of all retail deposits in China fall from 66 percent in 2004 to 58 percent in 2011, according to McKinsey.

View the full story in China Daily.

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Tags: China big four, China banks, China local banks