On March 19th, Bank of Communications published its 2008 performance report. In 2008, in the consistent spirit of steady management, Bank of Communications generated net profits of RMB 28.393 billion Yuan, representing an increase of 40.05% over the previous year. It took such measures as actively responding to the changing market environment and risks, strengthening the risk management and internal control, and boosting the transformation of management modes and business restructuring, to promote the sustained, healthy development of all businesses.
In accordance with the audit requirements of international financial reporting standards, by December 31st, 2008, Bank of Communications’s total assets reached RMB 2,682.947 billion Yuan, total liabilities RMB 2,532.852 billion Yuan and Shareholder’s equity RMB149.662 billion Yuan, representing an increase of 27.13%,28.11 and 12.61% respectively over the beginning of the year. In 2008, Bank of Communications generated net profits of RMB 28.393 billion Yuan and gained RMB 0.58 Yuan per share, representing an increase of 40.05% and 38.10% over the previous year. According to the2008 Top 1000 World Banks published by British Banker, Bank of Communications takes the 66th and 54th places respectively in terms of the total assets and tier 1 capital.
Business performance of Bank of Communications in 2008 shows some sparks:
Composed confrontation of complex situation, marked improvement of business performance: In the face of the complex and changeful market situation, Bank of Communications composedly seized the opportunity and maintained steady business growth by effectively liquidating all risks. By the end of 2008, customers’ loan balance had reached RMB 1,328.59 billion Yuan and deposit balance RMB 1,865.815 billion Yuan, respectively representing an increase of 20.29% and 19.94% over the year start; average return on assets was 1.19% and average rate of return on common stockholders’ equity 20.10%, an increase of 0.13% and 1.94% over the previous year respectively.
Continuously improved business structure, obviously increasing interest margin Bank of Communications made great efforts in credit restructuring. By the end of 2008, its global public customers could fall into 10 levels, and the loan balance of quality customers from level 1 to level 5 accounted for 80.50%, an increase of 6.1% over the beginning of the year. In 2008, Bank of Communications generated net interest income of RMB 65.862 billion Yuan, an increase of 22.10% on a year-on-year basis; net interest margin and net profit margin rate respectively 2.88% and 3.02%, an increase of 10 and 17 basic points over last year. The interest margin has obviously increased.
More innovative service products, increasing intermediary services: Bank of Communications’s traditional quality intermediary services including bank cards, custody and international settlement etc. were further developed. Income from bank cards and custody services increased to 45.66% and 25.85% respectively. Meanwhile, Bank of Communications increased its efforts in the product and service innovation, and generated more quick income from warranty, financing consultancy and agency insurance etc. In 2008, Bank of Communications realized net commission income of RMB 8.837 billion Yuan (an increase of 24.55% over the previous year), accounting for 11.44% of the year’s net operating income (an increase of 0.14% over the previous year).
Steady advancement of integrated management, increasing synergistic effect: By taking active measures to confront the financial crisis, Bank of Communications’s overseas branches maintained steady development in general. Its total assets reached USD 21.911 billion, an increase of 26.19% over the year start; while the non-performing loan ratio was also kept at a low level. All subsidiaries maintained a good momentum of development. At the end of 2008, all subsidiaries’ total assets reached RMB14.078 billion Yuan, contributing profits of RMB 215 million Yuan to the group. Under the non-banking license, Bank of Communications is providing such services as securities, fund, insurance, trust, lease and etc.
Enhanced infrastructure construction, increased management efficiency: Bank of Communications kept improving its service flow and IT and channel construction to enhance the working efficiency and service quality. In 2008, all costs and expenses amounted to RMB 30.867 billion Yuan, an increase of 22.03% over the previous year, which was lower than the increase of net operating income; the cost/income ratio was 39.94%, a decrease of 0.35% over the previous year; average net profit per capita and per outlet reached 389,400 Yuan and 10.8246 million Yuan, an increase of 23.82% and 39.83% over the previous year respectively.
Consolidated risk management, stable assets quality: Bank of Communications further improved its overall management of risks, from credit risks, market risks, liquidity risks to operational risks; exercised consolidated management by including subsidiaries into the overall risk management system; and liquidated the negative impact of global financial crisis by taking timely and effectively measures. At the end of 2008, the impaired loan ratio decreased by 0.13% to 1.92% from 2.05% at the beginning of the year; and provisioning coverage ratio increased by 23.60% to 166.10%.
Active performance of social responsibilities, sustained upgrading of corporate image: Bank of Communications was one of the first Chinese banks to actualize the Green Credit project. Its green label coverage rate among credit customers has exceeded 99%. In 2008, with a unity of will, Bank of Communications staff fought against the natural disaster of Wenchuan earthquake and supported the disaster relief and post-disaster reconstruction by granting a total of RMB16.16 billion Yuan loans for resistance against earthquake, disaster relief and reconstruction. In July 2008, Bank of Communications successfully issued 3 billion Yuan RMB-denominated bonds in Hong Kong, and got subscription 6.8 times as much as the quota, hence enjoying higher reputation on the international market.
In the face of upcoming challenges and opportunities, against the backdrop of the national endeavor to stimulate the domestic demand and maintain the economic growth, Bank of Communications will strive to enhance its overall competitiveness in public business; further its strategic transformation, to promote the fast development of retailing, intermediary service, money management and fund; promote the management, system, product and service innovations, and keep enhancing its core competitiveness. Bank of Communications is to reward the trust and support of all parties with its good business performance through concerted bank-wide efforts.