Bank profit growth could miss 10% target in China

China's listed banks may see profit growth under 10 percent this year as financial reform and Internet businesses take their toll on the sector. Chief economist at the Bank of Communications Lian Ping forecast net profit growth for listed banks at around 8.3 percent this year, a notable retreat from the double-digit era, according to China Securities Journal. China Merchants Securities analyst Luo Yi put the figure at 9.4 percent. Difficulties for banks in securing handsome profits come as the government moves to gradually ease its grip on interest rates -- a major source of bank revenue. Last month, the central bank allowed interbank trading of deposit certificates, another step toward fully floating interest rates, following the removal of the floor on lending rates in July. Apart from liberalization of interest rates, the arrival of Internet firms like Alibaba at the fringes of the banking sector also threaten bank profits. In June last year, Alipay, the online payment arm of Alibaba, launched "Yu'E Bao (Leftover Treasure)," a service that gives Alipay's millions of users the option of directly channeling spare money in their accounts into high interest funds. As of Jan. 15, Yu'E Bao had 49 million users with aggregate deposits of 250 billion yuan (41 billion U.S. dollars). Lian from the Bank of Communications expected the impact of Internet finance to deepen in the future, pressuring conventional banks to restructure and adapt to market changes.