The financial and prudential performance of Chinese banks and Fintech lenders in the era of digitalization

KATSIAMPA, Paraskevi, MCGUINNESS, Paul, SERBERA, Jean-Philippe and ZHAO, Kun (2022). The financial and prudential performance of Chinese banks and Fintech lenders in the era of digitalization. Review of Quantitative Finance and Accounting, 58 (4), 1451-1503.

Katsiampa2022_Article_TheFinancialAndPrudentialPerfo.pdf - Published Version
Creative Commons Attribution.

Download (1MB) | Preview
Official URL:
Open Access URL: (Published)
Link to published version::


The years 2013 to 2019 marked an explosion in Fintech in China. We analyze the financial and prudential performance of 40 exchange-traded banks and 25 listed Fintech lenders in China during this watershed period. Among other things, traditional banks experienced rising operating costs, declining profit margins and softening loan quality. Consistent with a process of adaptation, traditional bank performance stabilized in the latter part of the study period (2018-19) after an initial period of decline. Study findings also highlight rising business and regulatory costs for Fintech providers over the course of the study frame. A marked deterioration in online lenders’ Special Mention and Non-Performing Loan (SML & NPL) positions arose during the period. Within the traditional bank group, smaller entities with fewer growth options and greater foreign ownership fared worst in prudential terms. Traditional banks’ financial and prudential performance also declines with time since IPO. Relative to joint stock commercial, city and rural banks, state-owned lenders registered more resilient performance, especially in relation to asset quality. In a final area, we construct a categorical Fintech proficiency variable for China's established banks. Our preliminary evidence suggests such proficiencies help stabilize SML and NPL rates and support financial returns. Overall, we offer major contribution to the banking literature by analyzing the financial and prudential performance of both incumbent and emerging lenders in one of the world’s most dynamic Fintech settings.

Item Type: Article
Uncontrolled Keywords: 01 Mathematical Sciences; 15 Commerce, Management, Tourism and Services; Finance
Identification Number:
Page Range: 1451-1503
SWORD Depositor: Symplectic Elements
Depositing User: Symplectic Elements
Date Deposited: 15 Nov 2021 12:31
Last Modified: 03 May 2022 13:45

Actions (login required)

View Item View Item


Downloads per month over past year

View more statistics