Summary:
In its twenty year history, the Industrial Bank has managed to turn itself into a nationwide bank and has made constant leaps and bounds. At the same time, it has become a source of pride and a keen servant of its home province of Fujian. Specifically, the people of Fujian are proud of the fact that such a renowned bank has come from their home, and the Industrial Bank, during its growth into a nationwide bank, has made quiet but significant contributions to the economic development of its home.
July 1, 2008 saw the official opening of Jimei Bridge, the newest bridge linking Xiamen Island to the mainland. This was another key infrastructure project on the west side of the Taiwan Strait supported by the Industrial Bank. As the only national listed bank to have originated from the west side of the Strait, the Industrial Bank has never forget its roots. In line with the “Four Focuses” and the “Four Development Strategies” proposed by the provincial government, the Bank has increased its support for the development of the region. In the process of propelling the take-off of the local economy, the Bank has also sought its own growth and development. Within the last three years alone, it has granted accumulative credit funds of over RMB 300 billion Yuan in the region. Just as Gao Jianping, the Bank's BOD chairman, says: “The Bank was “born" and “grew up” on the west side of the Strait. Therefore, fully participating in and serving the development of the region is not only our duty, but is also a sensible choice.
Key Transfusion Project
Metaphorically speaking, if we described the economy of the west side of the Strait as a huge dragon, than the key projects in the region would without question be its bones and muscles. Over the last 20 years, according to the demands project driven development, the Industrial Bank has constantly increased its support for key projects in the region. It has boosted the construction of a solid framework for the economic development of the region.
As early as 2006, the Bank set up a leading group of financial services for Construction on the West Side of the Strait, which was headed by Bank president Li Renjie. A responsibility system to ensure the sound completion of construction projects in the region was established. Special funds were raised and primarily invested in provincial infrastructure, basic industries, pillar industries and related auxiliary projects in accordance with the development plan of Fujian key projects. “During the “11th Five-year Plan” period, the Industrial Bank has offered support in the form of credit for key projects in the region. The scope of this support covers almost all fields of infrastructure construction.” A principal at the corporate department of the Bank told us.
Fujian's railroads have been developing rapidly in recent years. During the “11th Five-year Plan” period, five high-standard express railways are being built simultaneously. They are Wenzhou-Fuzhou, Fuzhou-Xiamen, Xiamen-Shenzhen, Longyan-Xiamen and Nanchang-Fuzhou railways. “Without the support from the banks, these railways wouldn't be able to be built!”, an employee at the Nanchang Railway Bureau exclaimed. In these railway projects, the Industrial Bank will invest a total of RMB 4 - 5 billion Yuan in stages. Of these funds, capital loans represent RMB 2.5 - 3 billion Yuan whereas project loans represent RMB 1.5 - 2 billion Yuan.
The Bank has had an even longer history of cooperating with provincial highway systems. In 1994, before the first highway in the province, the Quanzhou-Xiamen Highway, commenced construction, the Industrial Bank made a bold move to raise capital and give it full support while other banks in the province cautiously remained out of the picture. Subsequently, the Bank was the main financer of the construction of nearly all major highways in the province, including the Fuzhou-Quanzhou Highway , Beijing - Fuzhou Highway , Zhangzhou-Longyan Highway , Longyan-Changting Highway , Luo-Chang Highway , Xiamen - Zhangzhou Highway and Fuzhou 's Airport Highway and city ring road.
Apart from railways and highways, the Bank has also spared no efforts in funding other key infrastructure projects, including ports, the power grid, energy and television broadcasting facilities. According to statistics, by the end of June 2008, 44 provincial key construction projects had been granted loans from the Bank. The loan balance approached RMB 9 billion Yuan, representing an increase of over 40% compared to the beginning of the year. This growth rate was 30% higher than the average growth rate of loans in the whole Bank.
Supporting Cooperation between Fujian and Taiwan
Fujian sits just opposite Taiwan, and has numerous links to the island, such as culture, bloodlines and business. Being advantageously positioned to interact with Taiwan is possibly the most important geographical advantage of the region. Over the past 20 years, the Industrial Bank has supported the development of Taiwan-funded enterprises with its quality services. By creating an excellent environment for financial services, the Bank has strengthened the appeal of the region to Taiwan-funded enterprises and thus consolidated the geographical advantages of the region.
The Bank started by promoting industrial links between Fujian and Taiwan. It enhanced financial services for Taiwan-funded enterprises and has established close cooperative relationships with a large number of these enterprises. In addition to direct credit support, the Industrial Bank has further extended its services to hi-tech and high value-added fields, including international settlement, cash management, financing services and short-term financing bills. In December 2005, RMB one billion Yuan of short-term financing bills underwritten by the Industrial Bank for Xianglu Petrochemicals (Xiamen) Co., Ltd were successfully launched. This was the first short-term financing bill issued in on mainland to be based on a Taiwan-funded enterprise. It was also the first short-term financing bill ever to be issued by an enterprise on the west side of the Strait. In August 2006, Auto Optronics (Xiamen) Co., Ltd obtained a syndicated loan of RMB 3.2 billion Yuan provided by several domestic banks. The Industrial Bank was the domestic organizer for this loan. For Bank clients such as Fujian Huaying Display Technology Co., Ltd, South East (Fujian) Motor Corporation Ltd, Cheng Shin Rubber (Xiamen) Inc., Ltd, and Zhangzhou Tsann Kuan Industrial Co., Ltd, are all quick to praise the convenient and efficient financing value-added services offered by the Bank and not just the large credit lines it offers. These favored services include domestic and international settlement, value-added wealth management services and the integrated financial solutions that are suited to the production, supply and sales characteristics of companies.
Assisting SMEs
A new round of macroeconomic-controlled tight monetary policies has been adopted, meaning that many SMEs in Fujian were faced with increasingly thinly-spread capital. With its innovative financial services, the Industrial Bank has averted many financial emergencies that loomed in SMEs.
As early as 2005, the Bank defined quality SMEs as an important direction of business development and an important source of core clients. Along this line of thought, it began the dramatic innovation of financial service modes for the SMEs. For example, an organizational management system was especially set up; special credit policies were formulated, and approval validity management was adopted; operational tools were upgraded, operation flow optimized and abilities in risk identification and control enhanced. Furthermore, a financial solution entitled “Golden Sesame” was provided for the SMEs, and the related services were improved as well. Among these measures, the “Golden Sesame" solution, based on the characteristics of financing demands for production, purchasing and sales in SMEs, provides a one-stop solution to for the “8 major difficulties” in SMEs' financing. Making finance easier to obtain, this service has proven very practical for SMEs.
With almost three years of efforts, the Bank has achieved remarkable results that have won the recognition of supervisory authorities and the industry itself. On the basis of these results, it was named “Advanced Unit in SME Loan Work among Chinese Banks” the by China Banking Regulatory Commission. Some of the innovations made by the Industrial Bank have been used as sources of reference by other banks. By the end of June 2008, the Industrial Bank had provided a loan balance of 46.33 billion Yuan for SMEs in Fujian, which has significantly supported their growth.
Building an Energy-efficient West Side of the Strait
As the economy on the west side of the Strait continues to grow and the principle of “sound and rapid development” is further implemented, there has emerged a pressing need to promote energy conservation and emission reduction and strengthen environment protection. The Industrial Bank has brought its roles in directing capital flows and resource allocation into full play, strongly supporting energy conservation and emission reduction undertakings in Fujian. It has made its contribution to the cause of building an energy-efficient west side of the Strait.
In January 2007, the Industrial Bank held “Building an Energy-efficient West Side of the Strait---Industrial Bank News Conference for the Launch of Energy Efficiency Loans” in conjunction with the Fujian Provincial Economic and Trade Commission and the IFC in Fuzhou, declaring that it would take the lead by being the first to launch project loans for energy conservation and emission reduction. The product represented a move away from shortcomings in conventional corporate loans, such as a heavy emphasis on collateral mortgage and short terms, and emphasized the feasibility of the project itself and status of cash flows instead. Moreover, it made it easier for clients to secure loans and repay them by matching the repayment mode and period with the cash flow of the project. It is a financial product custom designed for SMEs' to conserve energy and cut emissions.
By this June, the Industrial Bank had provided credit to 12 energy conservation and emission reduction projects, such as ethylene treatment at the Fujian Refinery, energy-saving renovation of Fujian Cement production lines, Yangkou Hydropower Station in Shunchang and Xiamen Zhuoyue Biomass Energy. It is estimated that these projects can save 250,800 tons of standard coal and reduce the emission of 618,000 tons of carbon dioxide annually in Fujian. If calculated according to the 3,700 taxis in Fuzhou, the amount of emissions reduced in a single year would be the equivalent of the amount reduced if all the taxis in Fuzhou stopped running for eight-years.
According to the Provincial Economical and Trade Commission, the measures and efforts of the Industrial Bank has done a lot to promote the transformation of the economic development mode of the province and contributed to the goal of a 16% drop of energy consumption per unit GDP during the “11th five-year plan” formulated in Fujian Comprehensive Work Program of Energy Conservation and Emission Reduction.
(Fang Chuanliu, Straits Metropolitan News, Aug 22, 2008)