China Construction Bank reports results for the first quarter of 2021

Published time:2021-04-28

China Construction Bank Corporation (“CCB”) (A-share stock code SH:601939; H-share stock code HK:939) released its operating results for the first quarter of 2021 on April 28, 2021 (the following data for the Group, denominated in RMB, were prepared based on International Financial Reporting Standards). Compared to the end of 2020, CCB’s total assets and liabilities grew by 4.43% to RMB29,378.083 billion and by 4.53% to RMB26,908.834 billion, respectively, as of the end of the first quarter of 2021. The first quarter net profit amounted to RMB83.02 billion. The Bank’s capital adequacy ratio, Tier 1 ratio and Common Equity Tier 1 ratio stood at 16.71%, 14.01% and 13.43%, respectively.

In 2021, CCB will earnestly implement the plans and decisions made at the fifth plenary session of the 19th Central Committee of the Communist Party of China and the Central Economic Work Conference, and spare no effort in enhancing its "three capabilities”, and deepen “people-oriented” New Finance Initiatives. It will use financial resources to support the real economy, maintain steady loan growth, continue to optimize the credit mix, and support transformation and upgrading of the real economy. The Group will also tilt its resources further toward funding infrastructure, manufacturing, strategic emerging industries, green industries, the private sector, small and micro enterprises as well as other key industries and weaker sectors. It will grasp opportunities arising from expanding domestic demand and consumption upgrading, and serve the all-round financial needs of the people aspiring for the good life.

CCB will focus on the pain points and challenges of the economy and society, and promote its “Three Major Strategies”- housing rental, inclusive finance, and FinTech - in greater depth. As at end-Q1 2021, the housing rental integrated services platform covered 328 cities at the prefecture level or above, with 33.62 million real-name registered users. The Bank's inclusive finance loan balance increased by RMB152.292 billion from the end of 2020 to RMB1,576.030 billion, while the number of inclusive finance loan customers totaled 1.768 million, an increase of 72,400 from the end of 2020. The Bank made further progress in its FinTech strategy in terms of business support, technology middle platform building and independent innovation, fully enabling digital operation. It will continue to harness its strategic potential and comprehensively promote operational management and business development.

CCB continued to optimize its balance sheet and credit structure, and effectively support the real economy. The quarterly report indicated that as of the end of the first quarter, loans and advances to customers totaled RMB17,671.317 billion, up RMB883.885 billion or 5.27% from the end of the previous year; total deposits stood at RMB22,129.890 billion, up RMB RMB1,514.914 billion or 7.35%; and financial investments amounted to RMB7,071.599 billion, an increase of RMB120.946 billion, or 1.74%.

First quarter 2021 net profit amounted to RMB83.020 billion, of which net profit attributable to the shareholders of the Bank was RMB83.115 billion, up 2.52% and 2.80% year-on-year, respectively. Annualized return on average assets was 1.15%, and annualized return on weighted average equity was 14.42%. Net interest income increased by 4.27% year-on-year to RMB147.148 billion. Steady progress in interest rate marketization, changes in product mix and intense competition for deposits resulted in a narrowing of net interest spread by 0.14 percentage points to 1.96% and net interest margin by 0.13 percentage points to 2.13% from the same period last year. Net fee and commission income rose by 8.82% to RMB 41.079 billion on the back of fast-growing income from products such as agency business, trust and other entrustment business.

In terms of risk management and asset quality, CCB steadfastly safeguarded its bottom line by preventing the occurrence of systematic risk, and adhering to its “stable, prudent, comprehensive and active” risk culture. It explored and practiced new risk management approaches adapted to the digital economy and New Finance by way of systematic thinking and a philosophy based on comprehensive active intelligence so as to construct a technology led risk management and control system. As of March 31, 2021, NPLs stood at RMB274.253 billion, with NPL ratio at 1.56%, generally flat compared to that at the end of the previous year. The ratio of allowances to NPL was 214.94%, up 1.35 percentage points from the end of 2020. Meanwhile, CCB will standardize its asset management business according to regulatory requirements, and actively and diligently carry out work related to net value transformation of wealth management products, asset standardization and disposal of existing assets in a practical, efficient and orderly manner so as to ensure steady transition and sound development of its wealth management business.

In 2021, China begins a new journey toward comprehensively building a modern socialist country, and promoting rural revitalization. As a large State-owned bank, CCB has actively taken up its responsibility to help effectively link the achievements of poverty elimination to rural revitalization by implementing the new development concept based on New Finance. It has sought to alleviate the pain points related to people's livelihood associated with inclusive services in county-level rural areas. It has also taken concrete steps to serve rural revitalization by rebuilding the "Water Conservancy Project" of Agricultural Finance. On the basis of “technology, sharing and inclusiveness”, it has created an ecology based on agriculture, farmers and rural areas by harnessing internal FinTech "impetus" to open information channels and connecting external “new factors” related to agricultural and rural data. To help rural revitalization, CCB has leveraged its advantages, contributed its wisdom and provided solutions to carry out its pairing assistance program, which provided help for five poverty-stricken (regions) and 2,486 impoverished villages, lifting 750,000 people out of poverty. CCB Leading Group for Poverty Alleviation and CCB Ankang Poverty Alleviation Task Force were awarded the title of National Advanced Group for Poverty Alleviation. CCB will continue to leverage New Finance to promote rural revitalization with financial solutions and abilities. It will create an online-offline financial services system, innovate service models, develop financial products, prioritize services to lower-tier cities and rural regions, and leverage its "Yunongtong" specialty brand to continuously provide a suite of comprehensive services comprising smart rural affairs, e-commerce, daily-life convenience and financial services to rural customers. As at the end of March 2021, there were more than 527,000 "Yunongtong" inclusive financial service points, covering most townships and administrative villages nationwide that provided beneficial and convenient services to a total of 41.47 million people in rural areas. CCB has launched an innovative "Rural Revitalization - Yunongtong Card" and has issued more than 9 million cards. It has also built 2,022 “Yunong Schools” and launched 45,000 training sessions of various kinds, benefiting 3.51 million rural dwellers.

To further carry out Xi Jinping’s Thought on Ecological Civilization, and achieve the national goals of peak CO2 emissions and carbon neutrality with New Finance, CCB will focus on the pain points related to people's livelihood, perform its social responsibilities, and spare no effort to build a green low-carbon circulation development economic system. It will continue to enhance the green implications of New Finance practices, and extend more credit to sectors such as energy conservation and emission reduction, clean energy, clean transport and pollution prevention and treatment by using a combination of green bonds, green industry funds, green trusts, green leasing and other relevant instruments. The Bank will work hard to implement institutional, technology, product and management innovations.

Going forward, CCB will continue to deepen the implementation of the new development philosophy, and spare no effort in serving the new development paradigm. It will remain focused on serving the people's livelihood, and carrying out the social responsibilities of a large state-owned bank. It will leverage New Finance to consolidate the achievements in poverty alleviation to help implement the rural revitalization strategy, and actively explore the new development philosophy of green finance so as to embark on a new journey of high-quality growth with practical and effective service measures, and solid and sound operating results, in order to celebrate the 100th anniversary of the founding of the Communist Party of China.

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