This report profiles China’s banking industry, covering market data and trends up to May 2014. The report also highlights key leading players including Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, Bank of China, Bank of Communications and China Merchants Bank. In 2013, total asset and liabilities of the banking sector increased to RMB 151.4tn and RMB141.2tn, respectively. The number of domestic banking locations increased by about 7,000 annually to reach 209,000 at the end of 2013. Foreign banks experienced slower growth as well as a decline in profitability in their corporate banking businesses in 2013. Share of non-performing loan of commercial banks decreased in 2013 while the share-holding, city and rural commercial banks saw their share of NPL increased. Capital adequacy ratio of domestic commercial banks declined in 2013, however their core tier 1 capital ratio went up. China started direct trade between its currency and the Great Britain Pound as of June 2014. Key Points: • A total of 20 foreign banks are authorized to operate in the Shanghai Free Trade Zone as of April 2014. • Effective April this year, the reserve requirement ratio of rural commercial banks has been lowered by the central bank. • The central bank conducted stress test on 17 large local commercial banks and announced the test result in April 2014.