The semi-annual performances of public listed banks in China have improved as a whole, but the improvement varied according to the sizes of the banks. The status quo of the banking industry is relevant to the background of capital oversupply. The capital oversupply will lead to three consequences, 1) Chaotic innovation attributed to excessive capitals that would need to be absorbed by all kinds of financial derivatives. 2) The rise in asset price allows banks to create an illusion of prosperity. 3) Further discrepancy in performance between big and medium or small sized banks, which will carry more risk than the big banks.