On October 29, Industrial Bank (IB) releases its 2011 third quarter report. According to the report, in the first three quarters of this year, IB implemented the national macro-economic control policies and financial regulation requirements and effectively responded to the profound changes in business environment. Witnessing stable operations, steady growth in the asset-liabilit ies business, a gradual increase in load-pricing level, and rapid growth in intermediary business income, the Bank maintained excellent assets quality and gained the desired business performance.
Seizing c orrect development tactics boosted the steady growth in business scale. Confronting the tightening monetary environment, IB made adjustments to its assets-liability strategies in a timely manner to strictly control the credit scale, maintain the stable and balanced growth in credit supply, and actively extend the sources of various liabilities, thus boosting the growth of core liabilities through a number of channels including emerging businesses and products. By the end of the third quarter, the total assets of IB reached RMB 2.09 trillion, an increase of RMB 242.4 billion, up by 13.11% on the beginning of the year; total liabilities reached RMB 1. 984825 trillion, an increase of 227.147 billion, up by 12.92% on the beginning of th e year. The balance of all loans in both domestic and foreign currencies reached RMB 958.349 billion, an increase of RMB 104.01 billion, up by 12.17% on the beginning of th e year; the balance of deposits in both domestic and foreign currencies amounted to RMB 1. 26683 trillion, an increase of RMB 134.063 billion, up by 11.84% on the beginning of the year. The loan-deposit ratio was 73.14%, conforming to regulatory requirements.
Effectively i ntensifying pricing management to maintain a stable high performance. In the face of limited credit resources, IB intensified its loan pricing management and increased its bargaining capability continuously, lifting the proportion of loans with increased interest rate from the newly-increased loans in the third quarter to 81.85% from 66.74% in the second quarter. The interest spread kept growing, reaching 4.41% in the third quarter, up 9 bas is points on previous period. IB fully employed its conventional advantages in the field of inter-bank business and grasped market opportunities, maintaining stable non-credit asset scale and returns. By the end of the third quarter, the Bank realized RMB 35.007 billion net interest income accumulatively, an increase of RMB 7.572 billion on the same period, up by 27.6%; the net interest income in the third quarter reached RMB 12.846 billion, up by 3.80% on the previous period. On the other hand, the Bank controlled its costs well, witnessing a cost/income ratio of 29.91% in the first three quarters, down 2.12% on the same period. The realized pre-tax profits reached RMB 24.723 billion accumulatively, and the net profits returned to the shareholders of the parent company reached RMB 18.788 billion, an increase on the same period of RMB 5.193 billion, up by 38.2%.
Pushing forward operation al transformation and improving the profit structure. IB kept pushing forward its business transformation across the entire bank, focusing on developing emerging businesses such as wealth management, assets management and investment banking, etc. In the first three quarters, the B ank accumulatively realized income from handling charges and commission of RMB 6.291 billion, an increase of RMB 2.583 billion on the same period, up by 69.66%. The proportion of such incomes from the total business revenue increased 3.65%, which is mainly based on and increase in service capabilities and development of emerging businesses, s pecifically, the income from handling charges for agency service, bank and cards and payment settlement increased 57.10%, 112.95%, and 243.64% on the same period respectively, obviously higher than the incomes depend ant on conventional businesses and occupying - capital handing charges. The contribution of trust and lease businesses to the income of intermediary business has begun to emerge. Industrial Bank Financial Leasing, a wholly-owned subsidiary of IB, registered profits of RMB 216 million in the first three quarters, and RMB 102 million in the third quarter. Industrial Trust profits broke through RMB 100 million, hitting RMB 102 million in the first three quarters, growth of 282.35% on the same period.
Preventing key industr y risks and maintaining superior assets quality. According the principle of “reducing old loans and controlling new loans while restricting the total lending amount”, IB continued compressing the total scale of government financing platform loans to ensure that the limited credit resources could be used for completing projects for production and operation s and those under construction. Since the start of this year, the Bank continuously reduced its scale and proportion of government financing platform loans by taking the following measures: granting new loans prudently, calling in all mature loans, repay ing medium-and long-term loans in installments, and clearing and recovering loans from risky projects in advance, etc. In this way, the quality of assets based on platform loans was kept in good condition (free from overdue repayments, overdue interest and non-performance). The Bank continued intensifying the management over the clos ure operations of real estate project funds and the control over guaranties, strengthening its risk screening efforts. In this way, the non-performing rate of real estate loans was only 0.27%, and the quality of assets was higher than the average level of loans across the industry. Based on the results of tests on the real estate load pressure carried out in each quarter, the risks were comparatively low and generally controllable. By the end of the third quarter, the balance of non-performing loans across the bank was RMB 3.299 billion, down RMB 318 million on the beginning of the year; the non-performing loan rate was 0.34%, down 0.08% on the beginning of the year. With provision coverage up to 387.81%, the Bank further reinforced its risk resistance.
Transformation and reform helped to boost steady business development comprehensively. Take corporate finance as an example, there were the following prominent performances: First, market share kept increasing steadily. Under the circumstance of increasingly intense deposit expansion, corporate deposits at the Bank grew at a rapid rate, ranking near the front in the industry. The market share still kept increasing steadily compared with the beginning of the year. By the end o f the third quarter, the balance of corporate deposits reached RMB 1. 057807 trillion , an increase of 110.866 billion, up by 11.71% on the beginning of the year. Second, the business foundation was improved. By the end of the third quarter, IB had 276,700 customers in total, an increase of over 60,000 compared with the number at the beginning of the year. Over the la st two years, a net increase of 100,500 customers, up by 62%. Third, IB kept promoting business innovation. Businesses like supply chain finance, investment banking, cash management, small-sized enterprises, and green finance continued growing at a high speed. In particular, green finance business witnessed leap-frog development over the last two years. The newly-increased financing balance from the beginning of last year to the third quarter of this year reached RMB 55.889 billion, a five-fold growth. Green finance customers reached 1360, up 69% on the beginning of the year. Fourth, business management was effectively strengthened. Business integrity witness ed obvious improvement, IB further refined its management and improved its risk management awareness in an effective way, guarante eing balance between development risks and business incomes. In addition, IB featured banking business with IB characteristics, taking rural banks as the key target for bank-bank cooperation, and gradually established its batch service advantages. IB has carried out cooperation with 39 rural banks on agent access to the payment system and provided 14 rural banks with information system construction, operations and maintenance services. In addition, IB also advanced its cooperation with trust companies, financial companies, insurance companies and financial leasing companies in a steady manner.
In the fourth quarter, IB will comply the regulatory situation, optimize its assets-liability strategies, and make great efforts to obtain a suitable credit scale. While constantly expanding liabilities, the Bank will improve its long-term debt capacity in the aspects of service capability and product innovation, reinforce its non-credit assets configuration ability , and intensify investment in bonds, in order to keep assets liabilities developing in a steady manner. IB will further its system construction, consolidate basic works, and deepen its reform of systems and mechanisms in an active and reliable way, so as to guarantee the accomplishment of the objectives for the year.