SPONSORED STATEMENT
Despite uncertain economic conditions worldwide, China Construction Bank once again achieved strong profits and improved capital performance thanks to its prudent management style and comprehensive growth strategy.
In a complicated and volatile domestic and international landscape, China Construction Bank (CCB) outperformed its peers, further capitalized on its development strategy and increased financial support for economic and social development. Winning numerous prestigious awards for its strategy and focus, the bank is looking forward to continued growth and prosperity in the coming year.
Net profit at CCB rose 26.39% in 2010 over the previous year, reaching RMB135.03 billion. The bank outperformed most other major international commercial banks in presenting returns to shareholders. In 2010, return on average assets (ROAA) grew 0.08 percentage points and return on average equity (ROAE) increased 1.74 percentage points, providing shareholders with ROAA of 1.32% and ROAE of 22.61%.
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By actively pursuing service and product innovations, CCB continued a steady growth trend in net fee and commission income, with an increase of RMB18.07 billion or 37.61% in 2010 over 2009. With sustained improvement in asset quality, CCB’s non-performing loan ratio dropped by 0.36 percentage points from the previous year-end, to reach 1.14%. In pursuit of ever-stronger risk management and mitigation, the bank increased its ratio of allowances to non-performing loans by 45.37 percentage points from the previous year-end, bringing it to 221.14%.
As part of its core strengthening efforts, CCB also launched an A-share and H-share rights issue to help increase its capital base. On the back of the rights issues, the bank now boasts a capital adequacy ratio of 12.68% and a core capital adequacy ratio of 10.4%. The bank also pushed forward with its ongoing efforts to increase efficiency and improve cost management. As a result, it increased cost output efficiency and reduced the cost-toincome ratio by 1.77 percentage points to 37.25%.
At year-end December 2010, the market capitalization of CCB was around $220 billion, maintaining its position as the second largest bank worldwide by market capitalization.
Growth In New Businesses
The year 2010 was a landmark year for CCB. In addition to its strong financial performance, the bank also redoubled its independent innovation and R&D; efforts, expanding into emerging strategic businesses and accelerating the pace of integrated operation.
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Investment banking was a big growth area for CCB in 2010. In short-term financing, financial advisory services, and M&A; underwriting, CCB was the industry leader in China in 2010. Its financial markets business also grew over the previous year, with money market transactions increasing by 16.54% to RMB13.75 trillion. In domestic factoring, the bank saw very strong year-on-year growth, increasing its factoring activities by 227% over 2009. Insurance agency income reached a record-breaking RMB3.66 billion, and CCB’s investment and custodian business grew by 31.31% to RMB1.31 trillion.
The bank also moved into second place in the Chinese market for corporate annuities, growing its book of business to RMB36.65 billion in 2010. In addition, CCB saw rapid growth in its cash management operations, bringing in almost double the number of cash management accounts over the previous year.
CCB saw strong growth in its card business, alongside substantially improved operating efficiency. Debit and credit card transactions totalled RMB1.30 trillion and RMB406.52 billion, accounting for growth of 64.88% and 38.85% respectively. Its credit card loan book grew 52.30% to RMB55.44 billion.
In recognition of its prudent management in difficult conditions, the bank won numerous awards from various esteemed financial journals. It was commended as the “Best Bank in China” by respected global journals, including The Banker , FinanceAsia and The Asset magazine. CCB’s ranking in the Fortune Global 500 rose once again this year, and it was the highest-rated bank in Forbes ’ list of the Top 50 Most Valuable Chinese Brands.
Taking Social Responsibility Seriously
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CCB takes its role as a social and economic leader seriously, and continued its ongoing efforts to improve conditions for its customers and community. CCB made social welfare donations of more than RMB95 million, of which over RMB50 million was donated to various disaster-stricken areas in 2010.
The bank donated RMB14 million to Zhouqu County in Gansu province—which was ravaged by a deadly mudslide in 2010. CCB also donated and over RMB1.1 million to support disaster relief and reconstruction work in flood-affected areas in Hainan. Local CCB branches and sub-branches in the province launched express channels to facilitate the remittance of relief funds and guaranteed the provision of much-needed financial services.
As an environmental leader, CCB donated RMB5 million to the “Green Yangtze-Chongqing” campaign to facilitate construction and protection of the
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ecoenvironment in the Yangtze River and the Three Gorges reservoir areas. The campaign was jointly initiated by the National Afforestation Committee, the State Forestry Administration, China Green Foundation, the State Council Three Gorges Project Construction Committee and the Chongqing Municipal Government.
CCB also developed the concept of “Eco-Friendly Operation and Low-Carbon Tendering” among institutions managing enterprise annuity. As a result, all 10 member companies of the Joint Commercial Bank Meeting on Enterprise Annuity Business signed a proposal to promote related efforts. Each of these initiatives will contribute to the State’s energy conservation, environmental protection and low-carbon concepts for sustainable development.
