Focusing on the shareholding reform, accelerating the structural reform and institutional transformation comprehensively and promoting the transition into a modern financial business

Zhang Enzhao delivers the work report.

Liu Shulan chairs the conference.

Xie Duyang, Chairman of the Board of Supervisors and other officials of the bank including Zhao Lin, Zhu Dengshan, Luo Zhefu, Zheng Zhijie, Xin Shusen and Chen Zuofu attend the conference. <![endif]>

▲The conference room

On February 11, China Construction Bank held in Beijing the work conference at which President Zhang Enzhao first introduced the guiding principles of the National Banking, Securities and Insurance Work Conference and then delivered the work report Focusing on the Shareholding Reform, Accelerating Structural Reform and Institutional Transformation Comprehensively and Accelerating the Transition into a Modern Financial Business. Chaired by Deputy President Liu Shulan, the conference is attended, among others, by Xie Duyang, Chairman of the Board of Supervisors and other officials of the head office including Zhao Lin, Zhu Dengshan, Luo Zhefu, Zheng Zhijie, Xin Shusen and Chen Zuofu. Former officials of the head office including Zhao Daojiong, Su Wenchuan, Zhao Yuzhuo and Shi Chungui are also invited to today’s conference.

The major tasks of the conference include further studying and implementing the guiding principles of the 16th CPC National Congress, the Third Session of the Sixteenth Central Committee of the Party and the National Banking, Securities and Insurance Work Conference, reviewing the work in 2003, analyzing current situations and discussing and defining the operational objectives and main tasks of the bank in 2004 following the requirements of the State Council for the shareholding reform pilot of CCB.

In line with the current domestic and international economic and financial situations and the decisions of the National Banking, Securities and Insurance Work Conference, Zhang Enzhao raised the basic thoughts and major tasks of CCB in 2004: putting into practice the guiding principles of the Third Session of the Sixteenth Central Committee of the Party, the Central Economic Work Conference and the National Banking, Securities and Insurance Work Conference under the guidance of Deng Xiaoping Theory and the important thought of Three Represents; focusing on the shareholding reform to build standardized corporate governance structure, push forward the structural reform comprehensively, transforming the operational mechanism; establishing complete risk management system and long-effectiveness mechanism, strengthening management and internal control and cutting NPAs considerably; building sound financial management system, optimizing allocation of resources and improving profitability in an all-round way; developing a customer-driven marketing and service system and raising marketing capacities aimed at the best customers in the target market; constructing an advanced platform of technology application and management and promoting product and service innovation; establishing HR management system in compliance with the requirements of modern financial business and enhancing the quality of employees. Relentless efforts will be made to gradually build CCB into a modern financial business with adequate capital, sophisticated internal control, safe operation and sound services and efficiency. 　

Zhang Enzhao clearly defined the short-term objectives of CCB as follows: raising its profitability and efficiency to the leading levels of domestic shareholding banks within three years, growing into a shareholding commercial bank which generates the highest value for shareholders in the Chinese banking industry and ranking among the leading banks in Asia within ten years. 　　

Following the above basic thought and tasks, Zhang Enzhao outlined the detailed arrangement for the major work of the bank in 2004:　　

First, focusing on making careful preparations for the shareholding reform. In line with the requirements of the shareholding reform, it is necessary to accelerate the formulation of integrated reform plan, build the operational and management objective system which fully demonstrates the maximum value of the bank and further clarify the development strategies of the bank. Establishing standardized shareholders’ meeting, Board of Directors and Board of Supervisors systems and clearly defined internal responsibility system is required. The internal organizational structural reform should be phased out to reach the goal of clearly defining responsibilities, coordinating responsibilities, authorities and interest and maintaining the check-of-balance of separated front, middle and back offices. Meanwhile, the information disclosure system in line with the requirements of domestic and international capital markets and regulatory authorities should be developed. Based on the basic principle of coordinating business expansion with risk control and matching risk costs with risk revenue, a comprehensive risk management and internal control mechanism should be established to ensure that the quality of new operating assets, especially that of credit assets remains at high level and that the newly injected capital is safe and gets reasonable return. A financial management system with rational asset liabilities structure, efficient allocation of resources, sophisticated cost management, advanced performance evaluation and standardized management process should be set up to realize the maximum output input ratio of resources. Currently all the branches should focus on accomplishing the basic work for the shareholding reform. 　

Second, enhancing risk management capacity and improving asset quality. The efforts to tackle NPAs should be intensified and a campaign of “reducing NPAs, guarding against financial crimes, improving management and accelerating development” should be launched throughout the bank so as to improve the bank’s risk management and internal control system, maintain the momentum of “two cuts” of NPAs and clearly reduces various criminal cases especially large and serious financial crimes and major violations of rules and regulations. To that end, the first measure is to improve rules and regulations, strictly practice monitoring and inspection and hold those responsible to justice; the second is to further study how to improve the credit examination and approval mechanism; the third is to deepen the auditing system reform, intensify the vertical management of internal audit and enhance the role and position of auditing department in the internal control process; the fourth is to strengthen monitoring of the five categories of non-performing loans; the fifth is to tighten management and centralized disposal of non-credit NPAs; the sixth is to improve the management mechanism of internal control of risks; the seventh is to make full use of the functions of pre-event risk control and management of the legal department.　　

Third, truly setting up the operational philosophy of maximizing bank value and working hard to enhance the rationality, standardization and sophistication of operation and management. The operational philosophy of taking the maximization of bank value as the only objective must be established throughout the bank, and our structural reform, institutional transformation and even all the operating activities must comply with the internal requirements of the operational philosophy. The financial management should be improved following the requirement of the shareholding reform, and we should make overall operational planning, implement and promote the operational philosophy and strategies to guide and restrict operating activities. The comprehensive operational planning management model focused on the economic capital budget management should be implemented in an all-round way, and the risk and efficiency discipline mechanism with economic capital at the core should be established. Meanwhile, the capital budget management method should be constantly improved.

Fourth, strengthening marketing, optimizing business structure and promoting the healthy, stable and sustainable business development. Credit structure should be readjusted and optimized to ensure the balanced extending of loans. The business planning should be specified and attention should be paid to implementation with greater focus on complying with the strategies of expanding products and customer base in key areas. The access and exit standards for customers of related industries should be developed with the purpose of readjusting business structure. High attention should be paid to the potential risks of excessive investment and growth rate of some industries, and the new credit demands contradictory to the market access standards should not be supported at all. Unqualified customers should exit resolutely. The structure of real estate and individual credit business should be readjusted. Great efforts should be made to expand the savings deposit business and maintain the stable increase of deposit. The intermediary business should be stimulated to form new growth points of business development. International business should be promoted. The sustainable and healthy growth of various fund business should be maintained, and efforts should be made to raise customer service quality. 　　

Fifth, strengthening product and service innovation and improving the application of leading technologies. Continuous efforts should be made to build the platform of technological development and innovation, ensuring that the development objectives and tasks of project groups are completed as scheduled. The dissemination of data concentration project implemented in 13 branches, or better 15, and in the business departments of the head office must be guaranteed. The development of the management information platform and the common data standards of the head office and branches should be accelerated. The bank should focus on customer needs, improve the process of product and service innovation, clearly define responsibilities of various departments involved in the process and enhance the product development and service innovation mechanism. 　　

Sixth, enhancing the construction of the Party and corporate culture to provide strong guarantee for the reform and development. Great efforts should be made to continue to study the important thought of Three Represents and the guiding principles of the 16th CPC National Congress, the Third Session of the Sixteenth Central Committee of the Party and the National Conference on Human Resources Work and constantly improve the theoretical and policy consciousness of Party members and officials at all levels. The clean Party and government and anti-corruption campaign should be promoted. The construction of “home culture” should be enhanced.

Heads of all the departments of the head office, presidents of class-one branches, heads of overseas branches, heads of all the audit departments, director of the Harbin Training Center, director of the Changzhou Training Center and directors of the President’s Offices of class-one branches attended the conference.