On 29 October 2010, China Construction Bank Corporation (“CCB”) announced its operating results for the third quarter of 2010. During this period, CCB earnestly implemented national macroeconomic policies, continued its prudent operation strategy, stepped up transformation of the development mode and promoted its business restructuring. Various lines of business were able to maintain steady and rapid growth momentum.
After breaking through the RMB10 trillion mark in the first quarter of this year, CCB's total assets continued to grow rapidly and reached RMB10.57905 trillion by 30 September 2010 (unless otherwise specified, the data set forth herein are reported in accordance with International Financial Reporting Standards on a consolidated basis and are reckoned in RMB), representing an increase of RMB955.695 billion or 9.93% over the end of last year. Net loans and advances to customers were RMB5.368023 trillion, up RMB675.076 billion from last year end or an increase of 14.38%. Total liabilities reached RMB9.954556 trillion, a growth of RMB890.221 billion or 9.82% from last year end.
As a result of substantial growth in net interest income and net fee and commission income, coupled with a concurrent reduction in impairment losses from the same period last year, a net profit of RMB110.641 billion was realised for the first three quarters of this year, representing a growth of 28.41% over the same period last year. Meanwhile, annualised return on average assets and annualised return on average equity were 1.46% and 24.87% respectively, both among leading positions in the banking industry. Net interest income gained a year-on-year growth of 17.10% and reached RMB182.181 billion. Net interest spread was 2.35% and net interest margin was 2.45%, an increase of 0.05 and 0.04 percentage points respectively from the same period last year.
In the first three quarters, CCB further optimized its credit structure and facilitated the development of emerging strategic businesses. CCB’s traditionally strong areas, such as infrastructure and residential mortgage loans were further strengthened with quality and efficiency improving steadily. The growth rate of loans to the real estate sector was far slower than corporate loans. Such loans were extended mainly to major quality customers that have strong capital strength and high development potential and are located in areas with steady growth rate of housing prices. Loans to the agricultural sector increased by 28%, while loans to livelihood areas such as education and healthcare also surged by 16%, far higher than the average growth rate of corporate loans. By using lists, CCB adopted stringent credit risk controls against industries with excess capacity. Subsequently, the balance of loans to such industries fell by RMB19.4 billion from last year end. Fee-based businesses such as settlement, bank cards, agency and factoring developed rapidly. Net fee and commission income reached RMB48.681 billion, an increase of 36.12% over the same period last year. At the same time, CCB’s cost-to-income ratio maintained at a relatively low level of 33.73%.
Balance of non-performing loans and the non-performing loan ratio continued to decline simultaneously. As of 30 September 2010, the balance of non-performing loans was reduced by RMB9.549 billion and the non-performing loan ratio dropped to 1.14%, a fall of 0.36 percentage points from the end of last year. Meanwhile, allowances for impairment losses continued to be made in an even and steady manner, with the allowances to non-performing loans ratio reaching 213.48%, an increase of 37.71 percentage points over the end of last year. Thus risk mitigation capability was further enhanced. Over the quarter, capital adequacy level remained steady, with the capital adequacy ratio and the core capital adequacy ratio maintained at 11.64% and 9.33% respectively.
In the third quarter, CCB donated RMB3.4 million to Zhouqu County in Gansu province which was ravaged by a deadly mudslide and over RMB1.1 million to support disaster relief and reconstruction work in flood-affected areas in Hainan, where local CCB branches and sub-branches in the province kick-started express channels to facilitate the remittance of relief fund and guaranteed the provision of much needed financial services.
To facilitate construction and protection of the eco-environment in the Yangtze River and the Three Gorges reservoir areas, CCB donated RMB5 million to the “Green Yangtze-Chongqing” campaign 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 proposed the concept of “Eco-friendly Operation and Low-carbon Tendering” among institutions managing enterprise annuity. As a result, all the 10 member companies of the Joint Commercial Bank Meeting on Enterprise Annuity Business signed the Proposal of “Promoting Eco-friendly Operation & Low-carbon Tendering”. Each of these initiatives would contribute to the State’s energy conservation, environmental protection and low-carbon concepts for sustainable development. So far this year, CCB has made social welfare donations of more than RMB70 million, of which over RMB50 million were donated to various disaster stricken areas.
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