Date: March 14, 2013 Source: Science and Technology Daily
This is the fifth year that Industrial Bank (IB) Harbin Branch has been established.
Over the five years, the branch has persistently provided both financing and knowledge leveraging services based on the local economic development of Heilongjiang, and kept supporting the economic construction of the province with diversified financing methods. By extending more than RMB 60 billion financing loans to the local economy in the five years, it has made active contribution for the economic development and flourishing of the province.
Meanwhile, IB Harbin Branch also opened a new era for the development of corporate financing in the province and introduced a new convenient and efficient financing channel for enterprises here, supporting the economic development of the province in a desired, fast and board way.
In supporting technology-oriented enterprises in particular, IB Harbin Branch has played a leading-edge role in the finance industry in the province with a forward-looking vision. In February 2012, the branch took the lead to sign the “Overall Strategic Cooperation Framework Agreement” with Heilongjiang Science and Technology Department, an action opening a brand-new technology finance channel for technology-oriented enterprises in Heilongjiang, vigorously boosting the development and growth of technology-oriented enterprises in the province, and lending support for the fast development of hi-tech industries in the province.
Knowledge leveraging, opening diversified financing channels for enterprises
“Compared with developed provinces, Heilongjiang has a relatively closed economic environment. Local enterprises used to know little about direct-financing methods like issuing bonds. As a result, the branch encountered with great difficulties from the beginning in developing the business. Therefore, we have insisted on providing both financing and knowledge leveraging services. While helping enterprises with financing, we have actively imparted knowledge about direct financing to them and taught them how to manage financing with a variety of financing methods, so as to help them to access diversified financing channels,” said Liu Dianxin, Vice President of Corporate Finance of IB Harbin Branch.
For those enterprises which have never got involved in the business of investment banking, the first job that IB Harbin Branch does for issuing debt financing tools for them is to deliver lectures to them. “Every time I introduce investment banking to customers who are accustomed to traditional indirect financing for the first time, they seem to be at a great loss and feel very surprised. As they know little about the business, in general they show doubt about this model where a great many funds can be financed without pledge and guarantee. Then, we will describe the procedure and introduce successful cases to them. What's more important is we will touch them with such characteristics as short operating period, no scale restriction, massive single-financing amount, simple formalities, high efficiency, more flexible issuing mechanism compared with listing financing, and improvement of popularity and reputation of enterprises,” said Li Liwen, Director of the Investment Banking Department of IB Harbin Branch.
“Once enterprises accept the direct financing model and receive funds in this way, they will be more inclined to the method when they need financing again. Therefore, the cooperation between both parties will be very easy after enterprises accept the model though it's a bit difficult in the early contact. Moreover, the successful issuance of debts may achieve positive publicity effect in the society, and some enterprises with such demands would come to the branch on their own initiatives. With each issue, we could help enterprises to raise thousands of millions or even billions of funds, so our capability has been recognized by them. Our social image cannot but see fast elevation,” said Liu Dianxin, Vice President of the Corporate Finance Headquarters of IB Harbin Branch with full confidence. A large enterprise under State-owned Assets Supervision and Administration Commission came to our branch for our reputation, and it is estimated that our branch can help it to issue debt financing tools worth RMB 3 billion.
Another important job of IB Harbin Branch in serving the local real economy is to win the recognition of the government and regulatory authorities. At the end of 2011, President Kang Peng of IB Harbin Branch delivered a lecture on the theme of “Application of Innovative Financial Tools in the Construction of Local Economy and Fund-raising and Financing by Enterprises” to major leaders of CPC Mudanjiang Municipal Committee in Mudanjiang, describing the application of such new financing methods as debt financing tool and financing lease in an all-round way. The lecture has received heated response. “We have actively recommended this financing method to the provincial government and let them know that investment banking was actually to introduce funds across China to support the economic construction of Heilongjiang.” President Kang Peng of the branch has also reported the diversified financing businesses and development achievements of the branch to CPC Heilongjiang Provincial Committee and Heilongjiang Provincial Government for many times so that leaders and regulatory authorities of the province could learn and know the financing model. For the major construction projects and future development of the province, the branch also spared no efforts to put forward constructive suggestions. For the rich natural resources in Heilongjiang, the branch proposed to exchange financing with resources. It also actively gave ideas about the establishment of graphite exchange, construction of carbon credit finance, founding of Longjiang Airlines, and development of large-scale agricultural group integrating incubation, breeding, and popularization. It strived to assist the development of relevant industries with diversified financing approaches and products and boost the economic prosperity of Heilongjiang. Great importance was attached to these ideas by the province, and IB Harbin Branch has also quickly consolidated its position as a local mainstream bank.
Financing, infusing fresh “blood” to the local economic development
“Situating at the northeast frontier of China, Heilongjiang is a traditional old industrial base with comparatively conventional businesses and single financial approaches. While CPC Heilongjiang Provincial Committee and Heilongjiang Provincial Government brought forward the ‘Eight Economic Zones' and ‘Construction of Ten Projects' in recent years, the province witnessed fast economic development and financial demands. Thus, it is hard to satisfy the needs of construction and development of enterprises in the province with single financing model. Additionally, after the Head Office of IB put forward the business pattern of ‘one body with two wings', we set down the working principle of supporting the development of enterprises in the province with diversified financing approaches,” said President Kang Peng of IB Harbin Branch. President Kang is an expert of the branch in the area of investment banking and the leading figure of the branch's investment banking business. Opening his CV, we can see that he has started engaging in the business of investment banking in Hong Kong ten years ago. With such an expert in charge, the branch is bound to witness flourishing investment banking.
“In the recent two years, under the influence of economic environment both from home and abroad, the development of real economy at home encountered difficulties. Responding to the call of the state for ‘supporting the real economy' actively, we supported the development of large real enterprises with debt financing tools. A large coal group corporation is now the largest enterprise that we serve now,” introduced President Kang. The large coal group corporation is the largest SOE in Heilongjiang Province, a super-large coal enterprise, and one of the top 500 Chinese enterprises. In 2011, it ranked No.17 among the top 100 coal enterprises around China. To such a massive group, nothing is better than the debt financing tool to meet these capital demands. With communication and coordination in the early days, the short-term commercial papers and medium-term notes worth RMB 3 billion underwritten by the branch were successfully issued in September 2011, which became the non-financial corporate debt with the largest registered financing volume in the province and had a far-reaching influence. The act not only “introduced funds into Heilongjiang”, successfully attracting capital from other provinces to invest in the economic development of the province, but also served as a good demonstration for the province to strengthen the cooperation between enterprises and banks and extend financing channels for enterprises. Thanks to effective communication between the two parties and their reasonable judgment and forward-looking observation to the capital, the branch, based on professional and precise analysis, grasped the lowest point of market interest rate in the latest two months against the current varying capital market which is complicated and fluctuates frequently. On the second day after the successful issuance of the financing tool, the market interest rate of the debt rose significantly because the state adjusted the policy on deposit reserve. The market interest rate went up by 46 BPs within a week, and the value of price evaluation increased 0.83%, and thus saved the enterprise over RMB 20 million for financial expenses. This year, the branch issued debt financing tools worth RMB 8 billion for its headquarters and subsidiaries, helping them to settle their fund demands, reducing financial cost, improving the efficiency of capital flow, and boosting their extended reproduction.
In 2012, IB Harbin Branch provided financing services worth a total of RMB 10.43 billion for enterprises in various industries including electricity, railway, energy, water supply and drainage, and logistics across the province, injecting a great deal of fresh “blood” for the prosperity and development of local economy.
Integration, boosting the win-win cooperation between the bank and enterprises with diversified financing businesses
It will unavoidably procure the win-win cooperation between the bank and enterprises to serve the real economy with diversified financing tools.
President Kang Peng said with pride, “the ‘two-wing' businesses including investment banking of IB Harbin Branch grew quickly. Specifically, the issuance scale of debt financing tools hit RMB 10.43 billion, ranking front in the system and among local banks. The fast development of the ‘two-wing' businesses not only lent vigorous support to the fast economic development in the province, but also drove the sustained development of all businesses and kept enhancing the market competitiveness of the branch.” By the end of December 2012, the balance of all deposits of the branch hit RMB 27.881 billion, an increase of 64% over the beginning of the year, rising to the top among all local similar banks. The financing businesses not taking up the credit scale accomplished by the branch totaled RMB 32.431 billion across the year, accounting for 70.43% of its total capital businesses. The branch's total profits ranked top stably among similar banks in the province.
During its fast development, IB Harbin Branch also paid great attention to the disadvantaged social groups and performed its social responsibilities actively. Over the five years, the branch donated more than RMB 700,000 for disaster-stricken people in Longmay Coal Mine Disaster, Yushu Earthquake of Qinghai, and Zhouqu Catastrophic Debris Flow, as well as poverty-stricken college students and disadvantaged groups. It also organized six sessions of “IB Lecture Hall” and held more than 100 VIP experience rewarding activities. The works of the branch won wide recognition by all social circles. It has won dozens of honors in succession, such as “Model Entity in Boosting Local Economic and Social Development” by Heilongjiang Provincial Government, the “Most Influential Bank” by Harbin Daily, the “Municipal Exemplar Entity” by the Publicity Department of CPC Harbin Committee, and the Youth Model Entity of Heilongjiang Province.
Facing these pleasing business achievements, IB Harbin Branch did not feel high-headed and complacent, but it clearly realize that it must have quality services and constantly innovative products so as to remain invincible in the market. President Kang Peng was full of confidence to the future: “With preparation and development in the early days, we have built a highly professional business team, solid customer foundation in steady development and increasingly mature market environment. I believe that we will do better in the business of investment banking and our capacity to provide services for the real economy will become stronger and stronger.”