Deepen New Financial Actions to Promote High-quality Development
China Construction Bank reports operating results for 2020
Summary of financial data for 2020 (RMB):
Operating Results in Line With Expectations, Core Indicators Stable and Balanced
Beijing/Hong Kong, 26 March 2021- China Construction Bank Corporation (stock code: SH: 601939; HK: 00939) (“CCB” or the “Bank”) announced its operating results for 2020. In 2020, CCB calmly coped with the impact of the epidemic, conscientiously implemented the decisions and arrangements of the CPC Central Committee and the State Council, supported the epidemic prevention and control and economic and social development as a whole, deepened New Finance actions, served the hundreds of millions of people by meeting their financial needs, and achieved eye-catching operating results.
Profit grew in a steady and balanced manner. Return on average assets stood at 1.02%, weighted average ROE was 12.12%, and the capital adequacy ratio was 17.06%. Affected by factors such as the increase in net interest income driven by growth in interest-bearing assets and increase in net fee and commission income, the decrease in general expenses, and more provision made for losses on loans and advances, CCB obtained a total profit of RMB333,62 billion, up 3.07% over previous year; a net profit of RMB273,58 billion, up 1.62% over previous year; and an increase of net fee and commission income by 3.32%.
Asset and liability structure was further optimized. At the end of 2020, the total assets amounted to RMB28.13 trillion, representing an increase of 10.60% over the previous year. Loans and advances accounted for 57.70% of total assets, up 0.53 percentage point over the previous year. The total liabilities amounted to RMB25.74 trillion, an increase of 10.96%. Of this total, deposits from customers was RMB20.61 trillion, up by 12.24%, accounting for 80.08% of total liabilities, up 0.92 percentage point over the previous year; deposits of mainland Chinese residents were RMB10.18 trillion, an increase of RMB1.48 trillion, up 16.99%. The loan yield fell, affected by factors such as downward movement of Loan Prime Rate (LPR) and intensified efforts to give benefits to the real economy; due to the downward movement of LPR, yields on bonds and interbank placements decreased from previous year. Fierce competition led to a slight increase in cost of deposits. CCB’s net interest spread was 2.04%, down 12 bps YoY; net interest margin was 2.19%, down 13 bps YoY.
Deepen New Finance Actions, Advance “Three Major Strategies”
CCB upholds the mission and responsibility of a big bank, implements the new financial concept, takes “strengthening the ability to serve the country, guard against financial risks and participate in international competition” as the basic guidelines, promotes in depth the “Three Major Strategies” of house rental, inclusive finance and FinTech, adheres to the digital approach of “two-wheel drive” of technology and data, deepens the ability to leverage platform thinking and enterprise-level structure, unleashes potential energy of New Finance continuously, and steadily improves the overall performance, obtaining good economic and social benefits.
Gaining momentum in house rental business. CCB participated in promoting the development of the house rental market, helped the country to improve the housing security system, supported the development of policy-oriented rental housing, and made efforts to explore replicable market mechanisms, experience and models, thus creating a new path of providing financial support for both rental and purchase and improving the long-term mechanism of the real estate market. By the end of 2020, the comprehensive housing rental service platform had been rolled out to cover more than 96% of the prefecture-level and above administrative regions in China, with a cumulative online supply of more than 24 million units. In the housing deposit service, there is a cumulative contracted supply of 1.2 million units. CCB “JIANGONGJIAYUAN” offers over 140,000 units for long-term rental of over 230 projects. CCB has successively signed the strategic cooperation agreements on the development of policy-oriented rental housing with 11 cities including Guangzhou, Hangzhou, Shenyang and Nanjing. It plans to provide RMB300 billion of credit funds and about 1.2 million units (rooms) of policy-oriented rental housing within three years to solve the housing problem of about 2 million new urban residents and newly employed college students.
A benchmark for inclusive finance. CCB has made great efforts to create a new ecology in inclusive finance, and enriched the digital product system by forming a new-model product series of “Quick Loan for Small and Micro Businesses”, “Yu Nong Quick Loan”, “Quick Loan for Transactions” and “Quick Loan for Personal Businesses”. By the end of 2020, CCB’s balance of inclusive finance loans was RMB1.45 trillion, up RMB489.2 billion over the previous year, both the balance and the increase ranking first in the market. The interest rate of newly granted inclusive finance loans to small and micro businesses was 4.31%, down 0.64 percentage point over the previous year. The number of inclusive finance loan customers was 1,700,300, an increase of 375,200 over the previous year. The Bank has launched “Entrepreneurs’ Harbor”, a platform for startups and innovative enterprises. CCB has continuously improved its risk control capability, built an intelligent risk control management system in inclusive finance, and kept the quality of credit assets stable.
Internal and external empowerment by FinTech. CCB has comprehensively launched the construction of a technology-based middle desk, and continuously laid a solid foundation for technological innovation. Responding to business demands promptly, the Bank further promoted the development of smart finance, created a new retail pattern incorporating the C (Customer) Community scenario, built a new corporate business ecology in industry-finance integration, supported the coordinated development of capital market, promoted the building of smart channels and intelligent operation capabilities, and enhanced the Group’s integrated intelligent risk control capability. To empower the small and medium-sized financial institutions, CCB has exported risk control instruments to 328 small and medium-sized banks to promote joint risk management.
At the end of 2020, CCB had 13,104 financial technicians, accounting for 3.51% of the Group. In 2020, CCB's Fintech investment was RMB22.109 billion, up 25.38% over the previous year, and accounting for 2.93% of the operating income. A cumulative total of 564 patents were granted; among them, 368 were invention patents, ranking first in China’s banking industry.
Booming growth of rural revitalization finance. With FinTech, the Bank has made great efforts to create the distinctive brand of “Yu Nong Tong”, providing comprehensive services such as smart village affairs, e-commerce, convenience services and financial services for farmers. CCB has given full play to the advantages of the online “Yu Nong Quick Loan” and effectively reduced the financing cost of agriculture-related loans. By the end of 2020, CCB had over 540,000 “Yu Nong Tong” inclusive finance service outlets, through which over 100 million loans were granted to tens of millions of rural households last year. The balance of agriculture-related loans was RMB2.09 trillion, up RMB280.582 billion, or 15.52% over the previous year, and the balance of inclusive finance agriculture-related loans was RMB231.237 billion. The number of agriculture-related loan customers was 2,000,700, with an average loan interest rate of 4.75%, down 0.17 percentage point over the previous year.
Steady progress in digital operation. Adhering to the New Finance concept of inclusiveness, openness and sharing, the Bank took digital operation as the breakthrough point in implementing the “Three Major Strategies” and formed a set of effective digital transformation methods with CCB’s characteristics in accordance with the basic logic of “building ecosystems, developing scenarios and expanding user base.” Focusing on key areas such as house rental, inclusive finance, rural revitalization and smart government affairs, the Bank gave full play to the advantages of data technology support and scenario platform operation to enable financial services to reach out to the grass-roots level. The Bank extended financial services to better integrate into various daily life and social scenarios such as housing, transportation, education, healthcare and pension, and effectively realized the banking service model of a ubiquitous and accurate presence.
Support Pandemic Prevention and Control, Serve Real Economy
In 2020, the COVID-19 pandemic had a severe impact on the global economy. There were many uncertainties in the changing pandemic situation at home and abroad and the external environment. CCB proactively shouldered its responsibility as a big bank to support epidemic prevention and control efforts and resumption of work and production. It successively launched “10 initiatives” of financial services for epidemic prevention and control, 30 measures to support epidemic prevention and control and to resume work and production, 14 measures to strengthen financial services for micro, small and medium-sized businesses, 26 special measures to support Hubei, and 29 measures to stabilize foreign trade and foreign investment. CCB stepped up efforts to grant credit and granted a total of RMB125.68 billion credit funds to 12,166 key enterprises engaged in epidemic prevention and control. CCB reinforced fee reduction and waiver, offered preferential lending rates to key enterprises engaged in epidemic prevention and control, and helped customers affected by the epidemic to be bailed out through measures like extension of repayment of principal and interest, and extension and renewal of loans. CCB worked with the government to build an “enterprise oxygen cabin” to help enterprises resume work and production, and provided credit support of nearly RMB180 billion for more than 20,000 enterprises.
To ensure smooth business operation, the Bank set up a leading group for epidemic prevention and control without any delay and completed the organisational structure, disposal mechanism and emergency response plan for regular epidemic prevention and control. It intensified the care and safety protection for its staff and ensured sufficient epidemic prevention supplies. It quickly initiated the telecommuting mode under the staff integration platform, used more process robots, and adopted a combination of working modes such as working from home, on shifts and off-peak commuting.
Though online channels, the Bank provided its customers with high-quality and efficient online financial services. By running online consumer credit business such as “Quick Loan”, it offered convenient financing services to personal customers. Relying on the smart government platform, it helped build the national epidemic information dissemination network and launched the “CCB Smart Community Management Platform”, with an aim to facilitate urban and rural communities to foster an “online+offline” three-dimensional prevention and control system. The platform covered 2.46 million communities and enterprises with a total number of users exceeding 51.07 million. CCB made full use of its smart matchmaking platform “CCB Match Plus” where it launched featured sections including “Belt and Road”, “Greater Bay Area” and “China Railway Express” and built 3D digital banking exhibition halls for international exhibitions such as the first online Canton Fair and CIFTIS to manage online exhibition activities and promote cross-border matchmaking. As at the end of 2020, CCB and its employees donated funds and supplies worth a total of RMB317 million to the global fight against the pandemic, including 11.5 million pieces of pandemic prevention supplies.
Focus on Pain Points in People’s Livelihood, Fulfill Social Responsibilities
CCB actively explored new concepts for the development of green finance. In a bid to become a low-carbon, environment-friendly, sustainable bank that serves the public and improves people’s livelihood, the Bank utilized a combination of financial instruments such as green credit, green bonds, green leases and green trusts and continuously increased financial support in areas including energy conservation and emission reduction, clean energy, clean transportation and pollution prevention and control to extensively support and foster green industries. At the end of 2020, the Bank’s balance of green loans was RMB1.34 trillion, an increase of RMB166.905 billion or 14.20% over the end of the last year.
CCB made the fight against poverty an integral part of its New Finance actions. It increased credit supply to areas of extreme poverty and promoted products such as “Mingonghui” and “Loans to New community factories”. It supported the “one district and three counties” in Ankang City of Shaanxi Province to get out of poverty on schedule, and helped lift 1,370 impoverished villages and nearly 200,000 poor people in other parts of China out of poverty. At the end of 2020, the Bank’s balance of targeted poverty alleviation loans was RMB123.751 billion, an increase of RMB32.245 billion from the previous year. The Bank also actively helped the impoverished through e-commerce consumption and held the “Beyond 2020” series of poverty alleviation marketing activities via e.ccb.com. The annual transaction volume relating to poverty alleviation reached RMB17.080 billion, and the sales of agricultural products from impoverished areas reached RMB2.518 billion. In 2021, CCB will continue to optimize policies and develop innovative products and services in line with local conditions to enhance the stability of poverty alleviation and help translate the results of poverty alleviation effort into an effective impetus for rural revitalisation.
“Workers’ Harbours” to the public that served over 140 million people and had over 10.4 million online registered users. It continued to expand its “Worker’s Harbours+” model by teaming up with 780 third-party entities. With CCB University, the Bank carried out “Financial Literacy Promotion - Poverty Alleviation” program that offered trainings to 3.31 million participants, delivering financial knowledge to rural population.
public welfare platform, the Bank helped more people in need and brought positive energy to the society. In 2020, CCB’s charitable donations amounted to RMB449 million, RMB132 million of which went to targeted poverty alleviation. Over 740 livelihood-improving poverty alleviation projects were implemented throughout the year.
In 2020, CCB’s received wide recognition for its operation and service ability from its customers and the market. It won China’s Commercial Bank of the Year in the Wealth and Society Awards 2020 by The Asian Banker and the Best National Bank in the China Retail Banking Awards 2020 by Asiamoney. CCB continued to take the lead in international ranking. It ranked the second of The Banker’s Top 1000 World Banks for 7 consecutive years as at the year 2020; the tenth among BrandZ’s Top 100 Most Valuable Chinese Brands 2020 with a brand value of USD21.089 billion; and the 30th among Fortune’s Global 500 in 2020. Its ESG rating was also raised to A by MSCI. CCB’s influence as a big bank was further enhanced.
Proactively Defuse Risks, Further Improve Asset Quality
The Bank fully supported the country in winning the fight against the epidemic and in preventing and resolving major financial risks, ensuring that no systemic risks emerged. Adhering to a risk culture featuring “sound, prudent, comprehensive and proactive” management, the Bank, with systemic thinking and the concept of comprehensive, proactive and intelligent approaches towards risk management, endeavored to explore new risk management practices accommodating the digital economy and New Finance and to establish a modern technology-driven risk control system. Adhering to the principle of prudence, the Bank, on the basis of giving full consideration to the macroeconomic fallout of the COVID-19 pandemic and taking into account the actual risk situation of clients, stepped up the provision and disposal of risk assets to improve the risk offsetting ability. It prospectively conducted special stress testing to assess the impact of COVID-19, continued to put in place post-lending monitoring and management, and took measures to defuse risks in advance, which ensured the steady development of the business.
CCB’s NPLs was RMB260.729 billion, an increase of RMB48.256 billion from the previous year; the NPL ratio was 1.56%, up 0.14 pps over a year earlier; the ratio of allowances to total loans stood at 3.33%; provision coverage ratio was 213.59%, continuing to maintain at a relatively high level.
In the future, CCB will give priority to the following areas of work. First, it will build a group-wide comprehensive financing service system, continuously optimize the credit structure and strengthen effective support for the real economy. Second, it will consolidate its advantages as a leading player pertinent to the “Three Major Strategies”, push forward the house rental strategy to achieve new results, build itself into the preferred bank for inclusive finance and speed up the implementation of the FinTech strategy. Third, it will unlock new advances in corporate banking, retail banking and asset management business. Fourth, it will cultivate open and new ecosystem, promote the upgrading of digital operation, enhance its capability of scenario-based, ecosystem-based, and platform-based operation, and advance the development of online and offline integration. Fifth, it will enhance the modern governance capability of risk control and compliance, improve a comprehensive, proactive and intelligent modern risk management system and a long-term internal control and compliance mechanism, and attach great importance to the protection of consumers’ rights and interests.
In the new year, the external business environment is still grim and complex. Faced with the complex situation and various challenges at home and abroad, CCB will adhere to the general principle of pursuing progress while ensuring stability, remain committed to the new development philosophy and serve the new development paradigm in the new development stage, reinforce the implementation of New Finance actions, continuously enhance the “three capabilities” and further promote the “Three Major Strategies”. Adhering to the development layout of “New Finance + High-Tech”, CCB will accelerate the creation of a virtuous circle that supports the high-quality development of the real economy and realizes its own high-quality development, comprehensively embark on a new journey of high-quality development, and celebrate the 100th anniversary of the founding of the CPC with outstanding achievements.
About China Construction Bank
China Construction Bank Corporation, headquartered in Beijing, is a leading large-scale commercial bank in China. Its predecessor, China Construction Bank, was established in October 1954. It was listed on the Hong Kong Stock Exchange in October 2005 (stock code: 00939) and the Shanghai Stock Exchange in September 2007 (stock code: 601939). At the end of 2020, the Bank's market capitalisation reached US$191,889 million, ranking fourth among all listed banks in the world. The Group ranks second among global banks by Tier 1 capital.
The Bank provides customers with comprehensive financial services. With 14,741 banking outlets and 349,671 staff members, the Bank serves hundreds of millions of personal and corporate customers. The Bank has subsidiaries in various sectors, including fund management, financial leasing, trust, insurance, futures, pension and investment banking, and has more than 200 overseas entities covering 31 countries and regions.
The Bank actively practices “New Finance” and fully promotes the implementation of the “Three Major Strategies” of house rental, inclusive finance and FinTech. In line with the digital operation strategy of “building ecosystems, developing scenarios and expanding user base”, the Bank strengthens efforts to make breakthroughs in serving C (Customer) Community, empowering the public and bringing warmth to people; it exerts itself to empower B (Business) Community by fostering an ecology featuring co-existence and common prosperity and being the full life-cycle partner for enterprises; it enhances the linkage with G (Government) Community, plays an important role in facilitating social governance and wins the trust of the country as the financial pillar.
Adhering to the “market-oriented, customer-centric” business concept, the Bank is committed to developing itself into a world class banking group with top value creation capability. The Bank strives to achieve the balance between short-term and long-term benefits, and between business goals and social responsibilities, so as to maximise the value for its stakeholders including customers, shareholders, associates and society.
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Address of headquarters:No.25, Finance Street, Xicheng District, Beijing, China, Postcode 100033
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