About IB

Steady Development Based on Improved Structure

-- Industrial Bank Released Its Q3 Report of 2014

Industrial Bank (IB) releases the Q3 Report of 2014 today. With the slowdown of macroeconomic growth rate, deepened adjustment of economic structure and concentrated promulgation of policies since the beginning of this year, the business environment for banking became increasingly complicated.  In confrontation with the “new normal situation” of macroeconomy, the Company has taken more prudent business strategies and adjusted the development speed on its own initiative, focusing on improving business structure and tamping business foundation. As revealed in the report, based on increasing provision and accrual, the net profits attributable to the parent company realized by the Company accumulatively in the first three quarters hit RMB 38,304 million, a YoY increase of 15.72%; the basic earnings per share hit RMB 2.01; and the net asset value per share at the end of the third quarter reached RMB 12.28.

Business scale maintained steady growth. By the end of the third quarter, the total assets of the Company registered RMB 3,995.577 billion, up by 8.65% over the beginning of the year; the equity belonging to the shareholders of the parent company reached RMB 233.990 billion, up by 17.13%. The balance of various deposits reached RMB 2,205.228 billion, up by 1.61%; the balance of various loans reached RMB 1,492.121 billion, up by 9.95%; and the loan-deposit ratio remained at a good level among similar banks. The scale of institutional assets kept stable while the institutional liability structure witnessed further improvement. The capital sufficiency met the requirements of the new regulatory regulations at all levels. The core Tier 1 capital sufficiency and the Tier 1 capital sufficiency reached 9.40% and the capital sufficiency hit 12.18%, rising 0.72% and 1.35% over the end of the beginning of this year respectively.

The financial performance met expectation.

In the first three quarters, the operating income registered by the Company hit RMB 90.850 billion, an YoY increase of 13.13%, and the net profits attributable to the parent company realized amounted to RMB 38.304 billion, a YoY increase of 15.72%. The return on total assets and the weighted return on equity registered were 1.01% and 17.54% respectively. The daily average scale of interest-earning assets kept increasing steadily, and the net credit spread became stabilized and picked up. The profit structure witnessed sustained improvement. The incomes of handling charges and commissions increased 17.34% YoY, and the proportion in the operating incomes that such incomes account for rose 0.82%. Based on reasonable cost control, the cost/income ratio was 21.65%, down by 2.20% YoY, remaining at a low level in the industry. Asset quality was controllable as a whole. Since the beginning of this year, the Company has intensified sustained monitoring over the risk situations of credit assets with hidden troubles and worked out disposing plans in a timely manner to prevent and settle risks in a practical manner. With a range of measures, the Company sped up the collection and clearing of non-performing loans resorting to different methods. By the end of the third quarter, the non-performing loan balance reached RMB 14.774 billion, and the non-performing loan ratio hit 0.99%, up 0.23% over the beginning of this year.

With sufficient provision and accrual in all aspects, the Company kept reinforcing its resistance against risks. The assets depreciation loss due to provision in the first three quarters reached RMB 15.120 billion, up by 26.95% YoY, and the balance of loan loss provision hit RMB 41.577 billion, with the LLR/loan ratio of 2.79% and the provision coverage of 281.42%. Business improvement and innovation were promoted concurrently. In the area of corporate finance business, the Company has accelerated the process of sinking the customer service focus substantially. The balance of self-defined loans for small- and mini-sized enterprises hit RMB 101.1 billion, up by 34.03% over the beginning of this year. The public bid invitation for the first green finance credit asset-backed securities in China was accomplished in the national inter-bank debt market. The core customer group of retail banking has been expanded gradually. The balance of retail synthetic financial assets hit RMB 982.1 billion, up 29.04% over the beginning of this year. The refined operation of credit card business has been further pushed forward, and the private banking has gradually realized business transformation centering on the consulting-driven objective. The financial market businesses witnessed stable development. The scale effect of bank-bank platform became increasingly prominent, further reinforcing its service support to the whole bank. The Company has brought into play the advantage of group-based platform to strengthen the strategic coordination with subsidiaries. Taking it as a main grab to reform the business governance system and improve business linking mechanism, the Company further reinforced the business pattern of greater investment banking, greater wealth and greater assets management. The internet wealth management brands, such as “Money Manager”, “Manager’s Wallet” and Direct Bank, have been established gradually.

In the next stage, the Company will keep a close eye on and make adaption to the opportunities and challenges brought by changes in external environment, and make timely adjustment to business management tactics. Following the trend of financial development and requirements of strategic transformation, the Company will improve the business operation and management level, enhance asset-liability structure and strike a dynamic balance between short-term tactics and long-term policies.