On October 28, IB announced the performance of 2016 Q3. By the end of September, IB’s total asset have reached RMB 5.82 trillion, up by 9.78% compared with the beginning of the year; the net profit attributing to the parent company was RMB 43.982 billion with a YOY growth of 6.70%; the total ROA and weighted net ROA were respectively 0.80% and 14.11%, remaining excellent in the industry. During this period, IB adapted to the influence and challenges concerning bank development resulting from new economic normal and new financial pattern on its own initiative, stuck to the operation transformation direction with "light capital & high efficiency", seize every market opportunity and undertook its business in a down-to-earth and efficient way. All businesses maintained sound and stable development and made expected achievements.
Business scale saw stable growth and intensive capital operation was taking effect
In 2016 Q3, guided by the rate of return on weighted risk assets, IB timely adjusted the relevant asset liability policy and further motivated all sections of the Bank. And asset businesses maintained steady growth. Total asset in the end of the period stood RMB 5.82 trillion, up by 9.78% over the beginning; loan increased by 10.39% over the beginning; investment balance increased by 16.97% over the beginning. Meanwhile, it followed market-oriented trend and stuck to diversified liability development strategy, strengthen expansion of active liability. Issuance size and balance of NCDs ranked first in the market and issuance size and balance of CDs ranked second among shareholding banks.
Intensive capital operation was taking effect and capital endogenous supplemental ability was strengthened. Overall capital risks weighted 61.79% at the end of this period, down by 2.90% over the end of 2015. Adequacy ratio of Tier 1 core capital rose to 8.87% from 8.43% at the beginning of the year and adequacy ratio of Tier 1 capital rose to 9.59% from 9.19% at the beginning of the year. It also completed the issuance of Tier 2 capital bonds and adequacy ratio of Tier 2 capital rose to 12.54% from 11.19% at the beginning of the year.
Overall asset quality kept stable and provision security pad was consolidated. Balance of bad loan was RMB 33.593 billion and rate of bad loan was 1.71%, up by 0.25 percentage point compared with the beginning of the period. Provision and accrual was adequate. Provision of loan at the end of the period increased to 3.84%, up by 0.77 percentage point compared with the beginning of the year and provision coverage ratio increased to 224.68%, up by 14.60 percentage points compared with the beginning of the year, all remaining a higher status in the industry. Its ability to prevent risk was strengthened.
Consolidate linkage advantage of the Group "Big capital management" whole value chain was becoming prominent
As one of the commercial banks with the most financial licenses in China, IB continues to bring comprehensive operation advantage into play and strengthens collaborative linkage of the Group. Core competence of subsidiaries is improved and revenue of non-banking business in the Group continues to occupy a growing proportion. In 2016 Q3, total net profit of subsidiaries reached RMB 2 billion with a YOY growth of 16%; contribution to the net profit of the Group accounted for 4.55% with a YOY growth of 0.6%; the revenue of all linkage businesses that remain in intermediate business of the Group was RMB 1.975 billion.
In "Big investment bank, big capital management and big wealth" business field, IB acted as a bridge between big capital management and big investment bank and big wealth, created a whole value chain and made capital management business as a "new engine" for its transformation. By the end of the third quarter, IB's debt financing tools to non-financial enterprises amounted to RMB 317.3 billion, occupying 8.27% in the market with a YOY growth of 22.9% and the issuance size and number ranked first among all shareholding banks; scale of custody asset reached RMB 8.30 trillion, up by 15.03 % compared with the beginning of the year and was in the forefront of similar banks; scale of the Group's asset management business was nearly RMB 2.8 trillion, of which scale of asset under bank's management was nearly RMB 1.4 trillion and was in the forefront of similar banks; revenue of intermediate business was RMB 8.387 billion, occupying over 30% of net income of global intermediate businesses and ranking first for five consecutive quarters in terms of national bank wealth management capacity.
Profit structure was further optimized and retail business witnessed significant growth
In 2016 Q3, IB's total business income was RMB 118.658 billion with a YOY growth of 5.61%. Scale and proportion of non-interest income increased rapidly, its non-interest income saw a YOY growth of 40.11% and its proportion in business income rose by 7 percentage points; commission charges saw a YOY growth of 11.68%. In terms of operation expenditure, IB continued its reasonable control on costs. The cost-income ratio was 20.49%, down by 0.18 percentage point on a YOY basis and took a leading position in the industry.
It continued to speed up corporate finance business restructuring, pressed ahead with construction of transaction banks, centered upon cash management, trade financing, green finance and other unique businesses, and achieved stable growth in business development. By the end of September, IB's corporate deposit balance of local and foreign currency was RMB 2071.022 billion, ranking first among similar banks; the number of clients of transaction banks was 77407, up by 11.26 % compared with the beginning of the year, average amount of settlement per client and average settlement deposit per day was 23 times and 11 times that of non-transaction banks respectively; green financing balance of strategic core business was RMB 451.9 billion, up by RMB 51.6 billion compared with the beginning of the year.
Contribution made by retail business increased. By the end of September, average scale of comprehensive financial assets of retail clients was RMB 1320.418 billion, up by 11.2 % compared with the beginning of the year; revenue of retail intermediate business was RMB 12.2 billion with a YOY growth of 19%. Revenue of intermediate business including agency and transactions was RMB 2.3 billion with a YOY growth of 78%; settlement deposit occupied 61%; personal loan balance was RMB 680 billion, up by RMB 168.1 billion compared with the beginning of the year. Net profit of retail business was RMB 6.808 billion with a YOY growth of 30% and with a YOY growth of nearly two percentage points in terms of proportion in three major lines, acting as an anchor gradually.