Topping Joint-stock Banks in the Ranking of Competitiveness
The 25 years of constant, steady and fast development brings Industrial Bank (IB) the happiness of success while enabling it to give returns to all stakeholders.
On December 5, 2013, the 8 th Asian 21st Century Annual Finance Summit and Release Ceremony for the Research Report on 2013 Asian Banks Competitiveness Ranking was held in Beijing. Of more than 130 candidate banks from 10 Asian countries and regions, IB ranked No.7 in terms of bank competitiveness, two positions higher than that in the last year, and topped China's joint-stock banks. In addition, it also won the prize of “Asian Bank Offering the Greatest Returns to Shareholders 2013”.
Initiated in 2006, the “Asian 21st Century Annual Finance Summit and Press Conference for Asian Banks Competitiveness Rankings” was released by 21st Century Business Herald and the Financial Research Center of 21st Century Institute under Nanfang Daily Media Group collaboratively with many authoritative institutions including the Chinese University of Hong Kong, continuing its index system in terms of ranking method: profit index, objective index (scale, market share, asset quality, liquidity, capital sufficiency, efficiency, deposit base and branch network) and subjective index in three dimensions.
“It is a responsibility of a listed company to provide shareholders with sustained and objective returns on investment. Over the 6 years after its IPO, IB has also always provided stable returns on capital, and kept its rate of return on net assets around 25% for years, maintaining a leading position in the industry.” The Academic Committee of this summit gave a high comment on the performance of IB on returns to shareholders, in which it is said that they decide to grant the prize of “Asian Bank Offering the Greatest Returns to Shareholders 2013” to the bank considering its great efforts in giving effective returns to shareholders.
In August 2013, IB had its 25 th anniversary. By the end of September 2013, the total assets of the bank hit RMB 3.63 trillion, an increase of 11.77% over the beginning of this year, and its net profits registered RMB 33.102 billion, a YoY growth of 25.67%; the basic earnings per share amounted to RMB 1.74, and the net asset value per share RMB 10.21.
Such data are milestone to the bank: over 25 years of development, IB has successfully ranked among China Top 10 Banks, Global Top 50 Banks, and Fortune Global 500.
While keeping fast development, IB has always attached great importance to returns on investment of shareholders. Since its IPO in 2007, the bank has maintained steady profit distribution, with cash dividends totaling RMB 21.638 billion, which accounts for 18.69% of the total net profits registered accumulatively. It has always kept its weighted mean rate on equity (ROE) around 25%, ranking front among banks across China.
According to the “Annual Profit Distribution Planning 2012-2014”, within the coming three years, IB will distribute profits in cash each year not less than 20% of the annual distributable profits provided that the capital sufficiency meet the regulatory requirements o the national regulatory authorities. In the coming three years, as indicated by Board Chairman Gao Jianping of IB, the bank will, on that basis, also steadily increase the proportion of dividends and keep it at a reasonable level according to the profits earned and capital sufficiency.
In the opinion of Chairman Gao, returns to shareholders of a listed company come from its business performance, and the relations between instant and long-term profits and between accumulation of inner source based profits and availability of outer source based capital should be planned as a whole in developing the profit distribution plan. While improving the cash dividends steadily, the sustainable development of the company should also be taken into consideration. Moreover, the core of sustainable development lies in giving consideration to, balancing and constructing a harmonious relationship among multiple stakeholders, and incorporating the pursuit of harmonious unification of economy, society and environment into its own development objectives on its own initiative.
In recent years, IB explored the sustainable business model in an active manner while adhering to the differentiated business operation. The representative measures of innovation can be summarized into “one point” and “one line”, namely innovation in green finance and innovation in bank-bank cooperation.
As the first Chinese bank releasing energy conservation and emission reduction loan, energy efficiency financing, carbon finance and environmental finance, and also the only Chinese bank promising to follow the “Equator Principles” till now, IB has, by the end of November 2013, granted green finance based financing of RMB 333.1 billion to around 1,000 enterprises across China accumulatively, with the financing balance hitting RMB 174.6 billion, reducing the emission of CO2, SO2 and chemical oxygen demand (COD) by 68.6775 million tons, 901,200 tons, and 43,600 tons respectively.
With the “bank-bank platform”, Industrial Bank provides the 446 networked financial institutions, including the small- and medium-sized financial institutions in the rural areas, with services covering a number of areas such as payment and settlement, business agency, technology output and management training, and their customers may handle basic banking businesses at more than 25,600 outlets across China.
With the driving of the one “point” and one “line”, IB has also thus formed the business model with its own characteristics gradually in such emerging business fields as supply chain finance, cash management, investment banking, wealth management, and assets management.
Now, IB has preliminarily established a banking group engaging in multiple business fields covering banking, trust, financial lease, assets management, and fund. In the recent appraisals of “Asian Banks Competitiveness Rankings”, IB has successively won a number of honors, including the “Asian Bank for Best Supply Chain Finance Service”, the “Asian Bank with the Best Green Financial Services across Asia”, the “Most Profitable Bank in Asia”, and the “2009 Best Institutional Cooperation Bank across Asia”. At this time, it won another big prize, fully showcasing its powerful development momentum and overall competitive strength.