香港《南华早报》:CCB to switch focus to financial services

China Construction Bank Corp will embrace promising opportunities in the commodities market and bond and stock financing services, chairman Guo Shuqing said.

CCB, the world's second-largest lender by market capitalisation, would "speed up reform" by reducing its reliance on loans and move into other financial services, Guo said.

"We are not very ambitious in expanding overseas while the domestic financial market offers huge growth potential," he said.

His comments came after the bank last week reported first-quarter results that showed net income rose 34 percent from a year ago to 47.2 billion yuan (HK$56.4 billion).

Net interest income rose 25 percent to 71.6 billion yuan while net fee and commissions surged 37 percent to 23.2 billion yuan.

Guo said the results were achieved on the back of robust economic growth, rising interest rate spreads and improved pricing power after the central government cut lending targets this year

"However, the 30 per cent or so profit growth would not be sustainable in the long run," he said. "Loans' share of total income has been declining. Large companies tend to use direct financing more often."

To cope with the change, the bank is changing its focus to providing investment banking services to these clients, according to Guo.

The lender's consultancy fee income from mergers and acquisitions, debt restructuring, share listing and other financing-related businesses reached 2.62 billion yuan last year, up 154 per cent from 2009.

As regulators tighten their grip on loans to cool inflation, the central government has simplified the process for companies to sell bonds as a way to address their capital needs.

Guo said the bank also had a role to play in the promising commodity futures market.

"China is the biggest consumer of commodities, yet [trade volume in] our futures market only accounts for about 10 per cent in the world," he said. "We should quicken the pace to develop the market."

Commercial banks have been actively seeking approval from regulators to tap into the futures trade margin custodian and settlement businesses, as well as allow them to hedge and provide brokerage and market-making services.

CCB was considering participating in the futures market, hedging its exposure to borrowers whose businesses bore the risk of commodity price fluctuations or advising their clients on hedging, said Mao Yumin, a controller of investment and wealth management, at a forum last year.

The bank would like to "grasp the golden chances" brought by Shanghai's growth as an international financial hub, the gradual liberalisation of interest and exchange rates and the yuan's greater convertibility under capital accounts, Guo said.












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