January 7, the Industrial Bank announced its 2009 Performance Brief. According to the report, the bank achieved annual net profits of RMB 13.277 billion, representing a 1.892 billion increase over the previous year and an increase of 16.62%. Earnings Per Share reached RMB 2.66, an increase of RMB 0.38 compared to the year before. The Industrial Bank also announced its major accounting data and financial indexes for the year 2009. According to the figures, annual operating profits grew significantly to reach RMB 17.268 billion, representing an increase of RMB 3.298 billion and a growth of 23.60% over the previous year. Net assets per share totaled at RMB 11.91, representing an increase of RMB 2.11 and a growth of 21.46%.
According to comparisons, the operating revenue of the Industrial Bank in the 4th quarter alone amounted to RMB 9.728 billion, an increase of RMB 1.695 billion compared to the 3rd quarter; operating profits reached RMB 4.992 million, an increase of RMB 690 million compared to the 3rd quarter; net profits reached RMB 3.705 billion, an increase of RMB 356 million compared to the 3rd quarter.These figures represent new record highs for a single quarter. All financial indicators have maintained a sound upward momentum.
WIth With the bank having performed better than expected, industry observes stated that the Industrial Bank had seized on mainstream business opportunities posed by the adjustment of China's economic structure in 2009. The traditional deposit and loan businesses, with high yields and low costs, grew at a much faster rate than assets and liabilities in the same period. The ratio of credit to assets and the ratio of deposits to total liabilities increased continuously, and the overall return on assets rose significantly. Meanwhile, considering the diversified businesses and income structure of the Industrial Bank, intermediate operating revenue has maintained relatively fast growth.Generally speaking, the fast growth of net interest income and intermediate operating revenue was the major factor behind the Industrial Bank's earnings growth.
Observers pointed out that the Industrial Bank maintained a sound level of capital adequacy, with a capital adequacy ratio of 10.63% at the end of the third quarter and a core capital adequacy ratio of 7.5%. Provided that the refinancing plan is implemented well, the capital raised will support the development of the bank for the next two to three years. The Industrial Bank would actually be able to satisfy business requirements for the first half of the year relying on its existing capital stock and retained profits of 2009 alone.
Stable asset quality and outstanding risk control capacity are also important factors contributing to the excellent performance of the Industrial Bank. In the third quarter of 2009, the non-performing loan balance and ratio of the Industrial Bank both decreased. This drop might have been sustained throughout all of 2009, and the allowance coverage rate may have retained a relatively high level at about 230%.
Observers believe that since the macro-economic situation is expected to become more favorable in 2010, the asset quality of the Industrial Bank is likely to remain stable. With a view to the consistently reviving return on assets and low capital cost, the Industrial Bank's spread is expected to expand steadily, and the growth of asset size in the earlier period should still bring considerable earnings growth in 2010.