OREANDA-NEWS. September 11, 2013. China Construction Bank Corporation (Hong Kong stock code: 939, Shanghai stock code: 601939) announced its operating performance for the first half of 2013 on 25 August, 2013. For the six months ended June 2013, CCB’s annualized return on average assets and annualized return on average equity were maintained at 1.66% and 23.90% respectively, demonstrating a solid performance. The Bank’s non-performing loan ratio was 0.99%, unchanged from the end of last year (unless otherwise stated, the data herein are calculated in accordance with International Financial Reporting Standards on a consolidated basis in RMB).
 
With the slowdown of domestic economic growth and the acceleration of structural adjustment in China, CCB actively responded to challenges and continued to step up its efforts in the implementation of the government’s macro-economic control measures, adhered to a prudent development strategy, and proactively pushed forward business transformation and innovation. As a result, the Bank realized steady development in all business units and achieved stable growth in operating results.
 
Business performance remained steady
 
As CCB’s 2013 Interim Report indicates, the Bank’s key financial indicators continued to grow steadily in the first half of 2013. As at the end of June 2013, CCB’s total assets were up 6.34% from the end of last year to 14.86 trillion, of which the Bank’s total loans and advances to customers were 8.10 trillion, up by 7.76% from the end of last year. Deposits grew by 7.11% from the end of last year to 12.15 trillion and the loan-to-deposit ratio remained at an appropriate level. The Bank’s total capital ratio and total equity tier 1 ratio were 13.34% and 10.66% respectively maintaining a leading position among peers.
 
In the first half of 2013, CCB realized an operating income of 252,307 million, an increase of 10.75% from the same period of last year; it also posted a profit before tax of 155,189 million, up by 12.04% compared with the same period of 2012. The Bank’s net profit was also up by 12.65% from the same period of last year to 119,964 million. CCB continued to improve its cost management and achieved increased efficiency: the Bank’s cost-to-income ratio decreased to 24.63%, down by 0.65 percentage points from the same period of last year, maintained at a relatively low level.
 
Asset quality remained stable
 
CCB earnestly followed the government’s macroeconomic measures and regulatory requirements, enhanced risk monitoring and management for key regions and industries, and made timely and sufficient provisions for impaired assets. The Bank also stepped up efforts in credit structure adjustments, strengthened post-lending management, and enhanced risk prevention and mitigation. In addition, the Bank actively pushed forward the implementation of advanced measures for capital management, enhanced research, development and application of risk management tools, and continued to promote the development of the comprehensive risk management system. By the end of June 2013, CCB’s non-performing loan ratio was 0.99%; the ratio of allowances to non-performing loans was 265.20%; and the ratio of allowances to total loans stood at 2.63%.
 
In the first half of 2013, CCB adjusted its credit structure and attached great importance to supporting the real economy. The Bank strictly controlled its loans to local government financing vehicles and loans to the “6+1” industries with excess capacity. Proportions of these two types of loans against the overall corporate loans decreased from the end of last year. The balance of regulator-identified vehicle loans was 377,361 million, a decrease of 34,108 million from the end of last year, and the loans fully covered by cash flows accounted for 95.10% of the overall balance. Loans to the “6+1” industries with excess capacity decreased by 7,552 million from the end of last year. Intensified control and clean-up of high-risk assets enabled CCB to ensure its asset quality.
 
New progress made in serving the real economy
 
Against the backdrop of China's economic transformation and accelerated urbanization, CCB adhered to a stable credit strategy and further optimized its credit structure. The Bank made new progress in serving the real economy by supporting a large number of key construction projects in the country. As at the end of June 2013, the Bank’s domestic corporate loans and advances reached 5,129,986 million, an increase of 166,936 million, or up by 3.36%. The loans were mainly granted to sectors including infrastructure, small and micro businesses, and agriculture-related sectors. Total personal loans and advances of the bank were 2,234,622 million, increased by 216,796 million, or 10.74%.
 
As at the end of the reporting period, CCB’s loans to infrastructure sectors amounted to 2,174,419 million, an increase of 3.73% from the last corresponding period. Agriculture-related loans were 1,374,153 million, up by 7.79%; the number of pilot branches for new countryside construction loans increased to 26 and the new countryside construction loan balance reached 107,966 million, an increase of 45.48%. According to the SME standards jointly issued by four ministries and commissions including the Ministry of Industry and Information Technology in 2011, as at the end of June 2013, the Bank’s loans to small and micro businesses reached 750,258 million with a total of 77,074 clients from small and micro business sector. Residential mortgages increased by 171,171 million, or up by 11.20%, ranking first in the market in terms of loan balance. The Bank provided 77,344 million in development loans to indemnificatory housing projects, an increase of 30.91%.
 
Fee and commission income continues to grow
 
Since the beginning of this year, CCB continued to adhere to the principle of enhancing compliance in business operations and accelerating business development. On one hand, CCB’s fee and commission income grew steadily and healthily as the Bank closely followed regulatory requirements, adhering to compliance management, and applying strict fee standards. On the other hand, CCB enriched its products and services ranges and accelerated its pace of development by innovation and responding to market demands. In the first half of 2013, CCB’s net fee and commission income increased by 6,281 million, or12.76% over the same period last year to 55,524 million. The ratio of net fee and commission income to operating income was up by 0.39 percentage point to 22.01%.
 
As a strategic business of CCB, the credit card business grew steadily. The cumulative number of credit cards issued reached 47.44 million, while credit card spending reached 567,203 million and loan balance reached 218,431 million. In the first half of 2013, the income from bank card fees was 11,947 million, an increase of 30.83%. Driven by the credit card installment business, the Bank’s credit card business income was up by more than 50%. Fees collected from bank cards operating on ATM maintained a double-digit increase.
 
CCB’s investment banking business maintained a good growth momentum. In the first half of 2013, the Bank’s financial advisory services posted an income of 6,327 million, with income from new types of financial advisory services such as ‘Rongzhi’ amounting to 4,642 million, an increase of 30.61%, compared to the same period of last year. Underwriting of debt securities continued to lead the industry, with an underwriting volume of 167,300 million, an increase of 20.61%, compared to the same period of last year, ranking first in the market.
 
CCB achieved solid growth in its wealth management business. In the first half of 2013, the Bank issued 3,953 tranches of in-house developed wealth management products amounting to 3,199,200 million. The balance of wealth management products was 1,016,100 million. Given the concern over the use of raised funds from wealth management products, CCB disclosed that its wealth management funds were invested in sectors including manufacturing, transportation, warehousing, postal services, electricity, heat, gas and water production and supply. The Bank did not invest in sectors that are restricted by government policies, such as commercial real estate and industries with high pollution, high energy consumption or excessive capacities.
 
Innovation drives business transformation
 
CCB reinforced its fundamental product management and innovation, accelerated the building of its customer rights protection system, and promoted the continuous improvement of innovative product capability and enhancement of market competiveness. The Bank has achieved nearly 300 innovations in various business segments in the first half of 2013. 
 
CCB vigorously promoted the development of an integrated network, integrated teller system and integrated marketing teams, and has made great progress in these aspects. In the first half of 2013, a total of 966 single-functional personal banking outlets were transformed into integrated  outlets; 5,527 single-functional corporate banking counters were newly transformed into integrated counters; and the Bank built 3,139 integrated sales teams. By adopting policies such as segregating frontline and back office, the Bank gradually formed comprehensive and multi-functional front line offices, and centralized back offices. The Bank also strengthened the on-the-job training to improve employees’ comprehensive service abilities, and optimized the mechanisms of its marketing service system to promote the collaboration of its personal and corporate banking businesses.
 
CCB accelerated the development of its electronic banking business. It has fully enhanced five key capabilities, including  channel transaction,  platform sales, system service, business innovation and risk control. The number of electronic banking customers and electronic channel applications increased rapidly, with a growth of 13.08% in personal online banking customers and an increase of 18.78% in corporate online banking customers. The number of account transactions through electronic banking accounted for 44.07% of the total number of transactions. E.ccb.com, the e-commerce financial services platform, has over 1.5 million registered members, with a transaction volume of nearly RMB10 billion and a financing volume of several billions RMB.   
 
Integrated and multi-functional operation moves forward
 
CCB’s 2013 interim report indicates that a total of 1,040 branch renovation projects were initiated and 196 new branches were opened. Meanwhile, 11 new private banking centers and wealth management centers were opened, adding up to a total number of 322. At the end of June 2013, CCB has newly established 42 small business operating centers in the form of “Credit Factory”, reaching a total number of 286 and covering over 236 cities at the prefecture level.
 
In the first half of 2013, the Bank further accelerated its internationalization, with the opening of its subsidiary banks in Russia and Dubai, and the Taipei branch successively. The integration of the Bank’s Hong Kong institutions progressed smoothly. At the end of June 2013,the Bank had ten tier-one overseas branches in Hong Kong, Singapore, Frankfurt, Johannesburg, Tokyo, Seoul, New York, Ho Chi Minh City, Sydney and Taipei; and five wholly-owned operating subsidiaries including CCB Asia, CCB London, CCB Russia, CCB Dubai and CCB International. Its overseas entities covered 14 countries and regions worldwide. The total assets of the Bank’s overseas entities reached RMB636,310 million, up by 22.70%from the end of 2012, with a net profit of RMB1,004 million, up by 49.45%as compared to the same period last year.
 
In the first half of 2013, CCB achieved excellent results in all business segments, which were widely recognized in markets and communities. The Bank received nearly 30 accolades abroad and achieved an outstanding performance in a number of influential international rankings, including 5th place in the “Top 1000 World Banks” of The Banker, advancing by one place from the previous year; and 50th place in “Fortune Global 500”, climbing by 27 places from the previous year; and 2nd place in “Forbes Global 2000”, progressing 11 by places from the previous year. 
 
In the second half of 2013, CCB will take proactive measures in response to challenges arising from a changing operating environment, and will further promote “integrated, multi-functional and intensive” development strategies. The Bank will also strengthen its foundation for development, deepen its operational transformation, enhance risk control and prevention and improve the utilization of the resources of remaining credit balance to strongly support the real economy and ensure a sustainable business growth.