Postal Savings Bank Of China Co Ltd Shs -H- Unitary 144A/Reg S
01658: XHKG (HKG)
| Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
|---|---|---|---|
| HKD 3.20 | Mynj | Mvjrhcbsn |
PSBC’s Resilient Growth in Fee Income Clouded by Regulatory Cut in Bancassurance Commission
Business Strategy and Outlook
Postal Savings Bank of China boasts a strong retail deposit base with market share of 9.5% in China. Its strong deposit base was supported by its inherent advantage in the rural banking market because of its long-term operations in postal savings and remittance outlets. It operates the largest branch network, covering all cities and nearly 99% of counties. The strong deposit base does not come without costs. PSBC must pay agency fees to its parent for deposits absorbed through agency outlets that were owned by its parent, which contribute over 60% of total deposits, making its overall funding costs higher than those of the moaty Chinese banks.