China Construction Bank reports operating results for the third quarter of 2021

Strengthen Service for the Substantive Economy and Speed Up Efficacy of New Finance

On Oct. 29, 2021, China Construction Bank Corporation (CCB) (Stock code: SH: 601939; HK: 00939) reported operating results for the third quarter of 2021 (The following data for the Group were prepared in line with International Financial Reporting Standards and denominated in RMB). In the first three quarters, CCB carefully implemented the decisions and arrangements of the CPC Central Committee and the State Council; promoted party history study and education and its mutual promotional effects with the center's work; availed the study as a chance to increase the "practical benefits for the people"; actively alleviated the social points of pain, difficulty and blockade; continuously strengthened efforts on "Three Major Strategies" in house lease, inclusive finance and Fintech; actively explored for digitalized operation modes, deepened the New Finance actions, coordinately supported normalized epidemic prevention and control and economic transformation and development, served the hundreds of millions of people by meeting their financial needs; guided the flow of funds into the substantive economy and the greatest needs of the people, and made due contributions to social and economic development. The report shows that CCB had developed robustly and achieved eye-catching operating results for the core indexes like asset scale, profitability and asset quality are coordinated in a balanced manner.

CCB strengthened service for the substantive economy and scale of assets and liabilities increased rapidly. CCB actively implemented the macroscopic regulatory policies and provided financial supports to the substantive economy continuously and stably. It is leading among the industrial peers in the incremental amount of loans in Yuan. As of September 30, 2021, its total assets reached RMB30,135.551 billion, up by RMB2,003.297 billion or 7.12% over that at the end of 2020. Its total liabilities reached RMB27,587.342 billion, up by RMB1,844.441 billion or 7.16% over that at the end of 2020. CCB distributed total loans and advance payments of RMB18,466.685 billion, up by RMB1,679.253 billion or 10.00% over that at the end of 2020. It mainly supported new infrastructure and new urbanization initiatives and major projects, high-end manufacturing, scientific and technological innovation, private enterprises, etc. Among them, corporate loan balance amounted to RMB10,348.156 billion, individual loan amounted to RMB7,774.787 billion. It took RMB22,536.436 billion of deposits, up by RMB1,921.46 billion or 9.32 % over that at the end of 2020.

Operating performance has grown steadily and net interest margin tended to stabilize. CCB achieved a net profit of RMB233.173 billion in the first three quarters of 2021, including RMB232.153 billion in net profit attributable to shareholders, up by 12.31 % and 12.79 % YOY respectively. It realised net interest income of RMB448.145 billion, up by 4.87% YOY. Net interest yield rate was 2.12%, registering gradual stabilization. Fees and commissions net income of RMB96.613 billion, up by 6.21% YOY, primarily due to rapid growth in trust and other custodian services, wealth management revenues and agency sales revenues.

Prudential risk prevention and control measures were taken and asset quality showed an uptrend. As of September 30, 2021, based on five categories of loans, the NPL of CBC amounted to RMB278.855 billion, up by RMB18.126 billion over that at the end of 2020. The NPL ratio was 1.51%, down by 0.05 percentage points over that at the end of 2020. The provision coverage ratio was 228.55%, up by 14.96 percentage points over that at the end of 2020. Its asset depreciation losses amounted to RMB143.256 billion, down by RMB18.507 billion YOY in the first three quarters of 2021. Wherein, the credit depreciation loss was RMB142.043 billion, down by 11.95% YOY.

ROE increased significantly and core indexes remained robust and balanced. In the first three quarters of 2021, CCB had an annualized mean ROE of 1.07%, and the annualised weighted average ROE was 13.15%, up by 0.62 percentage points YOY. Operating expenses were RMB137,484 million, an increase of RMB12,750 million from the same period last year. Its cost income ratio increased by 0.76 percentage points to 23.09% YOY, maintaining a good level. It had a capital adequacy ratio of 17.25%, a first-tier capital adequacy ratio of 13.96% and a core first-tier capital adequacy ratio of 13.40%, all leading the industry.

In the first three quarters, CCB considered the new development phase, integrated itself into the new development conditions, comprehensively promoted its new financial actions, continuously increased its ability to serve the substantive economy, stably promoted the "Three Major Strategies" in house lease, inclusive finance and Fintech, deeply implemented the green development concept and activated the powers for development of the countryside and sped up efficacy of New Finance.

It activated the house element market and continuously improved the house lease ecology. The house lease comprehensive service platform covered 96% cities and higher-level administrative regions of China and offered transparent transaction platforms for 15,000 enterprises and 38,000,000 leasers and tenants as of the end of September. CCB strengthened support to the development of policy-oriented rental housing and actively guided the robust development of market-oriented flat lease through financial services. Its balance of lending for institutional real estate lease service was RMB116.276 billion. It solidly promoted the "big and new inclusive finance" program to continuously improve the quality and development ability of inclusive finance. It maintained a solid status in the inclusive financial lending market, with a lending balance of RMB1.79 trillion, up by RMB369.391 billion over that at the end of 2020. Customer base was constantly consolidated. 1.8491 million inclusive financing clients, up by 153,500 clients over that at the end of 2020. In addition, CCB strengthened discounts to small and minisize clients and further strictly implemented the commission-free policy. CCB continuously enhanced its Fintech and implemented its Fintech strategy. CCB strengthened its digitalized operations to enable its business development and ensure the safe and stable operation of the system. It strengthened the development and operation of basic technical capabilities, including distributive, big data and artificial intelligence abilities; developed a duplex, agile and concerted technological middle-ground; launched 81 public technical services cumulatively to enable digitalized operations in an all-around manner.

CCB continuously enabled countryside revitalization and strengthened policy supports. CCB printed and distributed the CCB Action Plan to Consolidate Poverty Relief Achievements and Promote Countryside Revitalization through New Finance and CCB Financial Service Plan to Serve Key Counties under the National Countryside Revitalization Initiative to strengthen policy supports in organization, resource allocation, product system and service mode. In particular, CCB formulated the "1+6" integrated financial support plan to support the 160 key counties under the national countryside revitalization initiative to consolidate their poverty relief achievements and make new achievements in the countryside revitalization drive in an all-round way. As of the end of September, the balance of CCB’s agriculture-related loans was RMB2.39 trillion, an increase of RMB311.659 billion from that at the end of 2020, or up by 14.99%. The extensively-distributed "Yu Nong Tong" financial service points provided diversified financial services, including deposit, lending, transfer, payment and investment services, which are richer, more convenient and significantly more active and therefore widely welcome by farmers.

CCB fully implemented the green concept and promoted development into an ecology-friendly bank. CCB explored for a CCB solution to achieve the goals of "peak carbon dioxide emission" and "carbon neutralization"; established an ecology-friendly investment and financing mode; facilitated the green and low-carbon lending restructuring; optimized the green financial policies; diversified green financial products; strengthened resource input and accessory support and assurance measures; actively optimized the credit structure; and strengthened environment and climate risk control. CCB established a complete ESG governance framework; continuously increased the breadth and depth of environment information disclosure; and promoted the low-carbon restructuring of economy and society. According to the statistics of China Banking and Insurance Regulatory Commission (CBIRC), CCB's green loan balance was RMB1.82 trillion, up by RMB373.208 billion or 25.78% over that at the end of 2020. CCB applied green bond, green fund, green lease, green securities index and other innovative products and services to boost the development of green industries in an all-around manner.

Next, CCB will deeply implement President Xi's instructions; calmly respond to complicated and variant international situations and highly challenging domestic and international operating environments; cherish the concept of robust operation and value creation; assist with pandemic control and support economic and social development; promote new financial practices; comprehensively promote "Three Major Strategies"; create new digitalized operation modes; maintain robust, balanced and sustainable performances; capitalize on the development opportunities at the beginning of the "fourteenth five-year plan"; bear greater financial burdens and try to establish dual-cycle development; realize the all-around improvement of business development and market competitiveness; and continuously create greater values and returns for investors.