A Year-on-year Increase of 32% over Last Year

NPL ratio fell to 3.08%

In the first half of this year, China Construction Bank (CCB or the Bank) maintained stable increase in the business profit.  The domestic and overseas business reached a profit of RMB 32.84billion, a year-on-year increase of RMB 7.95 billion over last year, a margin of 32%. The total volume of loss asset disposed reached RMB 22.37 billion, and NPL ratio according to five grades credit system fell to 3.08%.

In the first half of this year, the Bank focused its work closely on developing into a modern financial institution, and prioritized shareholding reform and strengthening risk management and internal control.  The Bank steadily promoted reform, decreased non-performing assets, strengthened sound management, explored more markets, facilitated technological progress and financial creation and improved service quality.  As a result, strong development momentum has been shown in all business sectors.  Currently, the profit for the Bank’s domestic business is RMB 32.64 billion, a year-on-year increase of RMB 7.91billion, fulfilling 54% of the whole year’s plan.  The profit for the Bank’s overseas business is RMB 198 million, a year-on-year increase of RMB 39 million, fulfilling 46% of the whole year’s plan. Non-performing loan ratio fell to 3.08% according to five grades credit system, down 5.69 percentage point over the first quarter.
　　
With the improvement of asset quality and business performance, the major financial indicators of CCB improved markedly.  In the first half of this year, the net return rate of CCB was 0.79％, 0.05 percentage points over the first quarter, 0.19 percentage points higher than the first half of last year. The ratio of net equity return was 14.89%, an increase of 0.9 percentage point over the first quarter. The ratio of cost to income was 32.3%, 8.6 percentage points lower by a large margin over the end of last year.  The coverage rate of NPL provisions was 75%, nearly reaching the target of 80% set by CBRC.

Since this year, while strengthening restructure, CCB has strengthened the management of credit loan approval and loaning plans, achieving good results.  Firstly, to strengthening internal control and ensure loan quality, and take back the loan approval authority of the second level branch banks when appropriate.  “Examination and approval” is applied in the management of new loans and bank acceptance.

Second, the mode of credit aggregate management has been reformed, the past guiding planned management has been turned into restrictive management of economic capital budget.  Through the control of economic and capital aggregate and the requirement of economic capital return, the credit loan direction is effectively guided, so that the aggregate can be adjusted and restricted by itself.

Thirdly, the credit restructuring is enhanced.  The mechanism of credit access and exit is applied to control credit input in high risk business.

Fourth, to strengthen monitoring and examination and ensure the quality of new loans.  The quality of new loans has become an important examination criterion of the whole Bank.  The Headquarters requires further emphasis in the real-time monitoring and intensified management of the new loan risks.

Fifth, to step up technological creation and increase risk precaution ability.

 

This year CCB has stepped up creative risk management technology.  The credit risk rating early warning system developed by CCB is put into use formally in the whole Bank, greatly increasing the early warning and preventive capacity of credit risk, and providing enormous support to risk policy making and risk ceiling management.