By Chen Xiaoyan （Fujian Daily）
Although having been confronted with a complex and rapidly changing macroeconomic situation since the beginning of last year, the Industrial Bank (IB) has continued its commitment to rational development and approached the global economic crisis with a cool-head. Under this approach, the Bank's key business indicators have broken past records to bring in highly positive results. At the end of 2008, the Industrial Bank's total assets amounted to RMB 1.0234 trillion, representing an increase of 20%. This was the first time that the Bank's assets exceeded the trillion Yuan mark. Net profits for the year stood at RMB 11.363 billion. It took 13 years for the Bank's assets to grow from zero to RMB 100 billion. Following this, it took a mere 7 years for its assets to grow from 100 billion to 1 trillion.
The Industrial Bank has maintained an average growth rate of over 30% in deposits, loans and net assets for the last seven years. Moreover, net profits have increased at an average rate of 50% during this period and asset quality has continued to increase at a rapid pace. The Industrial Bank ranks in the top flight of national banks in terms of rate of growth, quality and profitability. It has made the transition from local to regional, regional to national and finally national to public at an impressive pace.
Moving-up the Ranks at Pace. According to the latest rankings of the world's Top 1,000 Banks released by the Banker Magazine , the Industrial Bank ranks 147 th in terms of primary capital, 421 places higher than in 2001, and 124 th in terms of total assets, up 289 places over 2001. With this, the Industrial Bank now ranks among the Top 200 Banks in the world and the Top 10 in China.
According to Mr. Gao Jianping, the Chairman of the Board of Directors of the Industrial Bank, the reason that the Bank has been able do perform so well in the current environment boils down to its study and implementation of Scientific Outlook of development, active participation in the construction of West Coast of the Straits, resilience in the face of adversity and continued commitment to rational development.
Increasing Credit Investment and Serving Development on the West Coast of the Straits
Jimei Bridge, a new bridge linking Xiamen Island to the mainland, was officially opened to traffic on July 1, 2008. This was yet another major construction project in the region financially backed by the Industrial Bank. “Major construction projects on the west coast of the strait supported by IB credit cover almost all areas of infrastructure development.” Said a principal from the business department at IB headquarters.
This is testament to how the Bank serves the region that it is rooted in. Responding to government calls to turn the region into a leader in rational development and cross-strait ties, the Industrial Bank has capitalized on the fact that it is a comprehensive operator based in the region to pool resources, attract capital from other parts of the country into the region and progressively increase the credit and financial services it provides to support economic and social development in the region. Organizations operating under the Bank in Fujian Province have witnessed simultaneous increases in the proportions that their loan balance and credit expansion account for in the Bank. The credit growth and loan-to-deposit ratio of these organizations are higher than the average total in the Bank.
Statistics indicate that by the end of 2008, the Industrial Bank had a loan balance of RMB 106 billion in Fujian, representing an increase of 28.3 billion over the start of the year. Credit expansion in the province accounted for 28.5% of the total credit expansion of the Bank. Loan balance recorded an increase of 37% over the beginning of the year, which was 12% faster than the average growth rate in the Bank. Moreover, the average loan-to-deposit ratio of organizations of the Bank operating in Fujian Province averaged at 79.44%, which was 8.62% higher than the average in the Bank. In 2008 alone, the gross credit funds granted by the Industrial Bank in Fujian Province surpassed RMB 150 billion. These funds were used to provide important financial support to a number of major projects at both provincial and municipal levels, including the renovation of the main power grid, the Fuzhou-Xiamen Railway, Jimei Bridge, Wanbian Bridge, Nanping-Pu'nan Freeway, Quanzhou-Sanming Freeway, Project for the Integration of Refining and Chemical Industries in Fujian, expansion of Zhangping Power Plant and the Straits West Market of Metal Materials and Products in Sanming City.
Meanwhile, the Industrial Bank has promoted financial innovation vigorously. The scale of its financing has been increased through the active application of innovative tools. According to statistics, in 2008, the Industrial Bank transferred RMB 3.395 billion of credit assets and provided RMB 1.45 billion worth of trust financial services for credit assets in Fujian. This equivocates to a RMB 4.845-billion increase in credit.
Moreover, the Industrial Bank innovatively launched its “Golden Sesame" financial solution for small and medium enterprises. A wide range of featured services are provided under the plan that aid low-cost procurement, financing procu r ement, expanded procurement, quick withdrawal, increased sales, avoidance of bad debts and provisional shortage of funds, and venture capital. These services have helped a large number of small and medium enterprises in Fujian overcome their financing difficulties.
Just as Gao Jianping said, “The Industrial Bank was born on the west coast of the strait and this is where it has grown. Comprehensive participation in the development of the region is both a responsibility and a sensible choice.”
Scientific Outlook for Development, IB Assuming Its Social Responsibilities
On October 31, 2008, the Industrial Bank publicly committed itself to the Equator Principles, thus becoming the first “Equator Bank” in China. This was yet another major move that the Bank has taken to promote sustainable finance after being the first to launch project finance for energy saving and emissions reduction initiatives in China.
The Industrial Bank has been an active proponent of sustainable finance since 2006. It is dedicated to promoting the harmonious and ecological development of the west coast of the strait. IB has been highly active in the financing of energy saving and emissions reduction initiatives as well as green credit. Through this, it has successfully tied its social responsibilities and commercial activities together, achieving both social and economic benefits. By the end of 2008, the Bank had provided energy saving and emissions reduction loans to 14 projects in Fujian Province, including Ethylene Treatment of Fujian Refinery, Energy-saving Technological Renovation of Production Lines in Fujian Cement, Yangkou Hydropower Station in Shunchang and Zhuoyue Biomass Energy in Xiamen. These loans totaled at RMB 425 million, and projects supported are expected to be able to reduce consumption of coal by 392,600 tons per year and cut carbon dioxide emissions by 1,038,600 tons per year. The Bank has done a great deal to promote energy conservation and emissions reduction in the region.
As an enterprise with a strong social conscience, the Industrial Bank spares no efforts in supporting public welfare undertakings. After the catastrophic earthquake in Sichuan, the Bank offered a series of donations totaling at RMB 23 million Yuan. A total of 2,555 bank employees donated blood for the victims. In order to support the victims of the earthquake in rebuilding their homes, the Bank took the initiative among domestic joint-stock banks by offering RMB 200 million in loans for post-disaster reconstruction. In 2007, the Industrial Bank donated RMB 10 million through the Fujian Charity Federation to found the “Industrial Bank Charitable Educational Fund” which will see 500 students from impoverished backgrounds through higher education at 5 universities and colleges in the province every year. The Industrial Bank also donated RMB 2 million for disaster relief in the wake of the super typhoon “Dragon King” in 2005……
In addition to taking initiative itself, the Industrial Bank has also called on listed companies in Fujian Province to place a greater emphasis on social responsibilities. The Bank called on these companies to enhance organization and standards in corporate governance, assume duties in environmental protection by supporting energy conservation and emissions reduction initiatives, expand business opportunities by seeking innovations that support the public good and thus fulfill social responsibilities.
As a leading proponent of social responsibility among domestic banks, the Industrial Bank has won a number of awards in competitive evaluations organized by renowned organizations and institutions in China and abroad. So far, it has been awarded “Best Joint-stock Commercial Bank, Best Corporate Citizen, the Sustainable Banking Award, Award for Best Social Responsibility Contribution, Best Corporate Public Image Award, China Top 100 Most Valuable Listed Company, No.1 in Top 10 Listed Companies for Growth Potentials and Best Return on Equity in Mainland China. The Bank has forged a renowned finance brand for the west coast of the strait that has enhanced the influence of the banking industry in the region.
The international and domestic situation in 2009 is set to be more complex and severe than before. Commercial banks will be tested by the chill that is to come. According to Gao Jianping, in the year ahead, the Industrial Bank will continue its commitment to the Scientific Outlook of development, act in accordance with the requirements of national macroeconomic policy and financial regulations, proceed rationally and take the initiative. It will become more closely involved in economic and social development in the region and promote advancement by pursuing its own rational development. It will continue to play its role as a comprehensive financial service provider and promote advancement by aiding the development of companies. It will continue to function as a financial bridge and promote advancement by strengthening financial contact and cooperation across the Taiwan Strait. It will continue to fulfill its social responsibilities vigorously and promote advancement by forging a well-known financial brand for the west coast of the strait. In this way, the Industrial Bank will make new contributions towards the region's goal of becoming a leader in rational development and cross-strait ties.