China Construction Bank Reports Operating Results for the First Half of 2023

Deepen the New Finance Initiative to Promote High-quality Development     

China Construction Bank Reports Operating Results for the First Half of 2023

 

On Aug. 23, 2023, China Construction Bank Corporation (Stock code: SH: 601939; HK: 00939) (hereinafter referred to as “CCB” or “the Bank”) released operating results for the first half of 2023 (The following data are the Group data as of Jun. 30, 2023 and denominated in RMB). Since 2023, CCB has resolutely implemented the decisions and plans of the Central Party Commission and the State Council; deeply advanced the education campaign on the study and implementation of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era; effectively performed its political, economic and social liabilities; continuously deepened the New Finance Initiative; improved  the quality and efficiency of serving the real economy; and made new achievements in the high-quality development of the Bank.

In the first half of the year, CCB has made stable progress in operation and realised balanced and concerted development of its core indicators. The assets and liabilities grew rapidly. The total assets of the Group reached RMB38.25 trillion, up by 10.56%; net loans and advances to customers were RMB22.36 trillion, up by 9.11%. The total liabilities reached RMB35.30 trillion, up by 11.27%; the deposits from customers totalled RMB27.63 trillion, up by 10.42%. The profit has registered a stable growth. Profit before tax was RMB197.264 billion, representing an increase of 2.27% YOY; net profit was RMB167.295 billion, representing an increase of 3.12% YOY. The cost-income ratio was 23.72%. Its annualised return on average assets was 0.92%, annualised weighted average ROE was 11.95% and the capital adequacy ratio was 17.40%. The asset quality remains stable generally. The Group’s NPL ratio was 1.37%, which had declined stably. Its provision coverage was 244.48%, representing a good risk compensation ability.

 

Fully Support the National Economic Recovery

CCB helped with the recovery and development of the real economy. CCB kept on focusing on key areas and increased credit support for inclusive finance, advanced manufacturing, strategic emerging industries, green finance and other sectors. It actively supported happiness industries such as tourism, culture, sports, health care, education, elderly care, etc. It increased investments in government debts including treasury bonds and local government debts and green bonds with balance of financial investments increased by RMB713.216 billion or 8.35% over the year-end of 2022. Domestic corporate loans stood at RMB12.98 trillion, up by 17.82%, infrastructure loans were RMB6.51 trillion, up by 14.13%, loans for the manufacturing industry were RMB2.73 trillion, up by 21.40%, loans for private enterprises were RMB5.22 trillion, up by 17.33%, loans to strategic emerging industries were RMB1.99 trillion, up by 35.26%, and science and technology loans were RMB1.50 trillion, up by 21.57%. It offered supply chain financial support of RMB551.993 billion to over 98,500 clients along the industrial chains of 4,689 core enterprises in the first half of the year. CCB actively implemented the key regional strategies and the strategy of coordinated development of regions. The incremental loans to companies in the Beijing-Tianjin-Hebei region, the Yangtze River Delta and Guangdong-Hong Kong-Macao Greater Bay Area accounted for over 50% of the Group’s incremental loans. It supported measures for “stablising foreign trade and foreign investment” and helped with the high-level opening-up of China. Volume of trade finance accounted to RMB1.09 trillion; “CCB Match Plus” held over 250 digital exhibitions and matchmaking events for enterprises in 36 countries and regions; and the Bank resorted to the use of integrated products and services to provide all-around financial support and facilities to the “Belt & Road Initiative” projects.

Promoted and enhanced the consumer confidence. CCB deepened digital operation and promoted the integrated development of “binary star” platform of mobile banking and CCB Lifestyle. The “binary star” platform had 83,403,400 joint customers, wherein the number of customers with AUM (Asset Under Management) over RMB10,000 reached 16,840,400, up by 47.00% over the year-end of 2022. “CCB Lifestyle” helped distribute consumption coupons of over RMB1.1 billion in 168 cities, driving domestic consumption of nearly RMB4 billion. CCB implemented differentiated housing credit policies and supported people’s rigid and improved housing demands; the amount of individual housing loans increased by 4.28% YOY, making CCB the leading bank domestically in both loan balance and incremental amount. CCB satisfied the reasonable consumer financing needs of residents and promoted the development of the consumer market. The volume of credit card loans was RMB939.596 billion, up by 1.59% and that of individual consumer loans was RMB368.802 billion, up by 24.83%. The Bank promoted the  holistic wealth management strategy and the upgrading of the retail business operating model. The domestic individual loans stood at RMB14.54 trillion, up by 11.19%,  the number of individual customers was 747 million with a total AUM exceeded RMB18.14 trillion.

Kept proper custody of customers’ wealth. CCB strengthened forward-looking risk forecast, steadily developed treasury and asset management services, increased the service quality and efficiency of the financial market business and became the first commercial bank that operated specialised commodity services in China. CCB provided forward-looking financial services in the blue ocean market of pension finance and promoted the annuity service brand of “care-free health preservation”. It provided a total of RMB6.87 trillion to the interbank cooperation platform. Its asset custody volume exceeded RMB20 trillion.

Remarkable Results in Continued Implementation of New Finance Initiative

The potentials of the housing rental business were steadily unlocked. CCB continuously improved the financial system of housing rental based on the closed-loop services of "investment, financing, management and exit". It has signed 20 acquisition contracts under the CCB Housing Rental Fund with a cumulative investment of RMB4.888 billion. It can provide about 14,500 apartments for long-term rentals. The balance of corporate loans related to housing rental exceeded RMB300 billion. 272 projects for long-term rentals called “CCB Home” have opened for operation. Government-subsidised rental housing REITs (real estate investment trust fund) projects have rolled out in multiple regions.

Performance of the inclusive finance was further enhanced. CCB further explored digital inclusive mode and upgraded the "CCB Huidongni" platform. The balance of inclusive finance loans reached RMB2.86 trillion, up by 21.79%. The number of clients receiving inclusive finance loans registered 2.94 million, up by 416,900 over the year-end of the previous year. "CCB Huidongni" app had over 250 million visits cumulatively and served 10.53 million corporate clients. It promoted the project of "Entrepreneurs' Harbor" and provided 33,000 enterprises with credit support totalling RMB52.5 billion under the project. 14,000 outlets can provide inclusive finance services via 19,000 inclusive finance officers.

Potentials in rural revitalization were deeply tapped. It leveraged the advantages in FinTech and continuously promoted the development of the integrated service system of rural revitalization. The network of 370,000 “Yunongtong” service outlets covers most towns and administrative villages nationwide, serving over 58 million farmers. It developed the "Yunongtong" app to provide smart village services, e-Commerce services, daily convenience services and basic financial services to farmers. It had 10.24 million registered app users and granted loans totalling RMB52.2 billion cumulatively. At the end of June, the balance of agriculture-related loans of RMB3.62 trillion, up by 20.41%, serving 3.58 million agriculture-related loan customers, up by 13.10%. CCB developed featured agricultural industrial chain, rural government service and other ecological scenarios and launched 3,167 "Yunong Classrooms" to provide financial knowledge popularization, agricultural and technical training and other services to farmers.

The momentum of green finance was gradually unleashed. CCB integrated green concepts into business management, strategic development and corporate culture and built a diversified service system covering green credit, green bonds, green funds, green investment and others. The balance of green loans stood at RMB3.48 trillion, up by 26.39%. CCB Investment attracted private capital to jointly support the development of green industry and has invested RMB21.5 billion in total. CCB Trust made equity investments of nearly RMB3 billion in green finance.

The storage capacity of FinTech was continuously elevated. CCB continuously improved its professional technological capability, launched the "CCB Cloud" brand and the "Yunxiao" ecological cooperation programme. CCB independently developed an AI platform to enable product service innovation, digitalized operation and intelligent risk control and other areas. It enhanced the technology delivering capability and R&D quality and efficiency and made active progress in the group's IT integration project. It acquired 1,777 patents including 1,026 invention patents cumulatively, up by 521 over that of the end of the previous year.

Made significant achievements in opening-up, sharing and empowering the people. CCB deepened the "Workers' Harbours+" mode and opened 13,898 "Workers' Harbours+" to the public. It deeply promoted "Financial Literacy Promotion” education and training programme by providing 51,000 training sessions to regions where poverty had been eliminated and benefiting 4.42 million people cumulatively. To enable social governance through smart governmental services, with the vision of "government service centres by your side", CCB opened up its STMs (smart teller machines) at all outlets of its 37 tier-one branches to provide smart government services. The "trans-provincial services" area at its outlets provided services covering 31 provinces, autonomous regions and municipalities.

 

Improved Risk Management and Consolidated Asset Quality

Strengthened the group's integrated risk prevention and control. CCB optimised the "three defense lines" balancing and collaboration mechanism; strengthened risk management of domestic branches, overseas institutions and subsidiaries; strengthened development of concerted risk control mechanism for parent company and subsidiaries at home and abroad; carried out all-around risk identification for key institutions. CCB reinforced risk management in key areas, and strengthened proactive control over key areas such as local government implicit debt, real estate, small and medium-sized financial institutions, and overseas business, etc. It steadily promoted compliance with the Basel III and satisfied the additional regulatory requirements on global and China’s systematically important banks. It sped up the upgrading of the group's intelligent risk control system. CCB developed an enterprise-level risk management platform; deepened the construction of the "Blue Chip" and "3R" platforms and continuously enabled the quality development of inclusive finance, housing rental, green finance, finance for rural revitalisation and high-tech startups and the group's integrated risk prevention and control.

Consolidated and optimised asset quality. CCB sustained the balance of development and security; scientifically analysed the risk situations; managed and controlled risks in a forward-looking and proactive manner; stably, properly and orderly addressed risks; and maintained robustness of asset quality. At the end of June, the balance of non-performing loans was RMB316.636 billion; the NPL ratio was 1.37%, down by 0.01 pps compared with that in the end of last year; and the share of special-mentioned loans was 2.50%, down by 0.02 pps as compared with that in the end of last year.

Looking into the second half of 2023, the global economic outlook is more uncertain due to geopolitical conflicts, tightening monetary policies of major developed economies and other factors. However, the Chinese economy still has enormous development flexibility and potentials and the fundamentals sustaining long-term growth remain unchanged. The positive momentum of economic recovery is expected to continue, which will bring new opportunities for the banking sector to optimise business structure and improve efficiency. In the second half of the year, CCB will continue to enhance cohesion and boost its morale with Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era; carry out Party education campaign in line with high standards and quality requirements and promote the New Finance Initiative with further measures. It will make financial support for the real economy more stable, and ensure that the financial services play a positive role in boosting consumption, stabilising investment and expanding domestic demand. It will firmly promote high-quality development and make its due contributions to China's modernisation drive.