On December 19, 2012, the 11th Chinese Corporate Governance Forum sponsored by Shanghai Stock Exchange (SSE) and China Association for Public Companies (CAPCO) and jointly supported by the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) and Organization for Economic Co-operation and Development (OECD) was held in Shanghai. Ten listed companies won the 2012 Board of Directors Award. Of them, Industrial Bank (IB) won the award the second time after receiving the honor in 2011. Gao Jianping, Board Chairman of IB, attended the forum to receive the award on behalf of the bank, and delivered a speech on the theme of “Returns of Shareholders and Corporate Governance” upon invitation.
The Corporate Governance Expert Committee of SSE granted the award to IB for the reasons of “on the basis of winning the 2011 Board of Directors Award, the Board of Directors of IB continued furthering its corporate governance construction, performed the sustainable corporate governance concept, created a good atmosphere for scientific and democratic decision-making, improved the mechanism for corporate governance conduction and investigation and inspection, and fostered a homeland culture with IB characteristics”. The fact that IB won the Board of Directors Award again further showcases that the regulatory authorities of securities market fully recognizes the corporate governance construction of the bank. It marks that the corporate governance of IB has reached the advanced level in China.
Chairman Gao pointed in his speech that desirable returns to shareholders first depend on the sustainability of business performance. The key to achieve sustainable business performance first lies in the sustainability of business model and the guarantee of system and mechanism. In terms of building sustainable business model, over these years IB has always advocated the business concept of “sustainable development” actively and made great efforts in exploring and innovating in sustainable business models, which can be seen at “one point and one line”: “one point” means innovation in green finance, and “one line” means innovation in bank-bank cooperation. What's more important is that, with the demonstration and driving of the one “point” and one “line”, the bank has also made active exploration and innovation in such emerging business fields as supply chain finance, cash management, investment banking, wealth management, and assets management, thus establishing a business model with its own characteristics gradually. In terms of system and mechanism guarantee, Chairman Gao stresses that the core lies in well-established corporate governance, in particular the scientific and effective governance of board of directors. Over these years, IB has transformed its corporate governance objective from “shareholders' interests foremost” to “giving consideration to the interests of stakeholders”, and to “giving full consideration to the appeals of multi-parties”, keeping improving its governance concept and making its governance practice more scientific and effective. While attaching great importance to enhancing the member structure of board of directors, the bank has kept improving the professional performance capability of directors and broadening their macroeconomic, strategic and international vision in participating in decision-making; it has laid stress on creating a good atmosphere for scientific and democratic decision-making and establishing and improving the conduction mechanism for corporate governance; and it has highly set store by the investor relation, and endeavored to create a homeland culture with IB characteristics.
Thanks to the above bold innovation in business model and sustained improvement of corporate governance, the bank has, over the five years after its IPO, achieved great breakthrough in the aspects of overall strength, strategic progress, business transformation, and market position, becoming a mainstream banking group engaging in multiple business fields covering banking, trust, and lease. In addition, it has ranked among the top 10 Chinese banks and top 100 world banks. In terms of business scale, the bank's total assets increased to nearly RMB 3 trillion at the end of this third quarter from over RMB 600 billion at the beginning of 2007, rising 3.8 times, and the equity of shareholders grew to RMB 137.9 billion from RMB 16.2 billion, rising 7.5 times. In terms of business results, in the past more than five years, the bank registered a total of pre-tax profits up to RMB 134.9 billion and after-tax profits RMB 103.6 billion. The net profits in the first three quarters of this year increased six times over the total profits of 2006 before the IPO. In terms of asset quality, the non-performing loan ratio dropped to 0.45% at the end of the third quarter of this year from 1.53% at the beginning of 2007. In the meantime, the provision coverage was improved from 126% to 431%. In terms of employees, the staff number of the whole bank increased from over 10,000 at the beginning of 2007 to 38,000 at the end of the third quarter of this year, creating nearly 28,000 new jobs in five years.
As indicated by Chairman Gao, the returns to shareholders of IB, including cash dividends, has also kept steady growth continuously depending on the sustained and stable growth of business performance. In each of the past five years, IB paid dividends in cash each year. The total cash dividends hit RMB 13.1 billion in the five years, accounting for 21% of the total distributable profits available to investors in the five years. The mean proportion of cash dividends to net assets at the end of each year is 3.87%, ranking front among similar banks, 87 base points higher than the legal interest rate for the current one-year fixed deposit. Meanwhile, the net assets per share of the company increased to RMB 23 at the end of this September (adjusted price) from RMB 4 at the beginning of 2007, up by 4.7 times over the more than five years. In this June, according to the latest regulatory requirements of China Securities Regulatory Commission (CSRC), IB further refined its profit distribution policies and formulated the profit distribution planning for the coming three years, in which it promised that the profits distributed in cash each year would not be less than 20% of the annual distributable profits in the coming three years. On that basis, in the future it will also steadily increase the proportion of dividends and keep it at a reasonable level according to the profits earned and capital sufficiency.
The Special Awards for Chinese Corporate Governance are the highest honors that grant to listed companies by the Chinese securities regulatory authorities in the field of corporate governance. Two special awards were set in 2012, namely Board of Directors Award and Information Disclosure Award. In accordance with the “Circular on Carrying out the Appraisal of 2012 Board of Directors Award and Information Disclosure Award of Shanghai Stock Exchange for Listed Companies”, each award was presented to ten winners after the following procedures: voluntary application of listed companies for participation, verification of application materials, preliminary selection of the appraisal working group, public announcement, appraisal by expert committee, and approval of GM meeting of SSE. Centering on the theme of “Returns of Shareholders and Corporate Governance”, the 11th Chinese Corporate Governance Forum consisted of two special sub-forums: Returns of Shareholders and Healthy Development of the Securities Market and Returns of Shareholders and Development of Institutional Investors. Representative from the winning listed companies also held a round table meeting, exchanging experience on themes including “Practices of Listed Companies in Giving Returns to Shareholders” and “Transparency of Listed Companies and Management of Investor Relation”.