2024 Strategy Implementation
2024 marked the 75th anniversary of the founding of the PRC and a critical year for China to fulfil the objectives and tasks set in its 14th Five-Year Plan. Despite mounting external pressure and growing internal difficulties, China’s economy delivered satisfactory performance characterized by both stability and progress. China’s banking industry actively responded to the complex internal and external environment and industrial pressure, and maintained certain resilience in operation through transformation and adjustment. Industrial Bank (CIB) scientifically assessed the situation and maintained strategic focus. Also，CIB sped up transformation and development，and leveraged internal operational certainty to navigate external uncertainties.
Ⅰ.Scientifically assessed the situation and maintained strategic focus. CIB proactively addressed risks and challenges, seized strategic opportunities, planned according to the situation and acted in line with the trend. While consistently implementing the “1234” strategy1, it continuously enriched the connotation of the strategy. It put forward “Three Business Cards”2, “Five New Arenas”3, and “Digital CIB” with foresight, which were highly aligned with the “five priorities” proposed at the Central Financial Work Conference, and also highly adapted to the requirements for banking transformation in the environment with low interest rate, narrow interest margin, high risks, and tightened regulation. Under the guidance of the strategy, in recent years, CIB has successively carried out reform of institutions and mechanisms to enhance organizational vitality, strengthened team building to ensure the Bank is run by experts, and comprehensively promoted digital transformation to explore new models. These efforts have enabled CIB to gain a first-mover advantage in the key areas of the “five priorities” and to continuously break new ground amid difficulties and challenges.
2024, CIB ranked 16th among the world’s top 1000 banks in terms of Tier 1 capital, rising by one spot from the previous year, and firmly remaining on the Fortune 500 list. It was honored with the “Bank of the Year in China 2023” awarded by The Banker magazine based in the UK, and was awarded the “National May 1 Labor Certificate” by the All-China Federation of Trade Unions. Its MSCI ESG rating was upgraded from AA to AAA, making it the only bank granted the highest rating in China’s banking industry for six consecutive years. Also, it has been named an “Advanced Unit in Green Bank Evaluation” by the China Banking Association for five consecutive times.
Ⅱ. Worked to build a value bank according to “five major characteristics”. CIB proceeded from the current situation and made long-term plans, proposing to build a value bank recognized by the market and with the characteristics of CIB.It regarded strong profitability, deep customer cooperation, low risk cost, balanced business structure and distinct business characteristics as the five major characteristics of a value bank.
In terms of profitability, in 2024, CIB recorded an operating income of RMB212.226 billion, up by 0.66% year on year.The net profits attributable to shareholders of the parent company totaled RMB77.205 billion, up by 0.12% year on year.
In terms of customer cooperation, the number of retail customers totalled 110 million, up by 8.77% from the end of the previous year. Among them, VIP customers grew by 8.78% in number. Corporate banking customers numbered 1.54 million, up by 9.57% from the end of the previous year. Among them, the number of potential and high-potential customers in corporate banking business grew by 14.41%. The coverage rate of cooperation with major types of interbank customers remained above 95%.
In terms of risk management, at the end of 2024, the NPL ratio was 1.07%, flat with the end of the previous year.The provision coverage ratio was 237.78%, a level within a reasonable range, and indicating relatively strong risk offset ability.
In terms of business structure,as for deposit, CIB adhered to the principle of “stabilizing scale and reducing costs”. As for loan, CIB adhered to the principle of “stabilizing input and adjusting structure”.Through efforts on both liability and asset sides, the net interest margin reached 1.82%, outperforming the expectation at the beginning of the year.
In terms of business characteristics, the balance of green loans under the PBOC’s statistical standards was RMB967.931 billion, increasing by 19.64% from the end of the previous year, and ranking first among joint-stock commercial banks. CIB Wealth Management’s AUM remained the 2nd in the market and its comprehensive wealth management capabilities topped the PY Standard’s list of national wealth management institutions for 28 consecutive quarters.The outstanding FPA of large investment banking4 business was RMB4.53 trillion, increasing by 3.31% from the end of the previous year.To be specific, underwritten non-financial bonds grew by 20.92% year on year, ranking 2nd in the market; M&A financing increased by 26.22% year on year, with the financing balance rising to the first place among joint-stock commercial banks.
Ⅲ. Effectively promoted the development of the “five priorities” of the financial sector，giving play to its advantages in differentiated operations. CIB proactively transformed the “country’s most fundamental interests” into the “top priority of the Bank”, fully leveraged its advantages in differentiated operations as a mainstream bank, and combined and advanced the efforts to promote the “five priorities” put forward by the Central Financial Work Conference and the initiatives to polish the “Three Business Cards”, deploy presence in the “Five New Arenas” and build the “Digital CIB”.
Strengthened technology finance business. As at the end of 2024, CIB collaborated with 324,500 technology finance customers, an increase of 14.15% from the end of the previous year. The financing balance of technology finance was RMB1.74 trillion, an increase of 17.82% from the end of the previous year. Specifically, with a “green finance + technology finance” approach, CIB built a product system, serving 29,600 technology finance customers, with a financing balance of RMB670.5 billion, an increase of 12.80% from the end of the previous year. With an “investment banking + technology finance” approach, CIB built a product system serving 1,520 technology finance customers, and recording RMB571.1 billion in outstanding FPA in large investment banking businesses, an increase of 43.76% from the end of the previous year.
Optimized green finance business. Leveraging its strengths to optimize the green finance business, CIB advanced group-wide green transition and integrated development. With an “investment banking + green finance” approach, CIB built a green investment banking service system and scaled up green financial services, granting RMB156.266 billion in the green investment banking business. With an “energy finance+ green finance” approach, it empowered the low-carbon transformation of the energy structure, serving 22,300 green finance customers, with a financing balance of RMB479.9 billion, an increase of 22.64% from the end of the previous year.
Drove inclusive finance business. As at the end of 2024, the balance of inclusive loans to small and micro enterprises was RMB555.932 billion, an increase of 10.97% from the end of the previous year. Specifically, with an “industrial zone finance + inclusive finance” approach, CIB, based on the industrial zone ecosystem, served 27,800 inclusive finance customers, and recorded RMB119.115 billion in loan balance, an increase of 28.31% from the end of the previous year. With a “digital finance + inclusive finance”, the “CIB Inclusive Finance Platform” had 384,500 registered users, an increase of 115.81% from the end of the previous year. Since its launch, the platform has facilitated a total financing amount of RMB395,502 million, an increase of 46.91% from the end of the previous year.
Deepened pension finance business. CIB introduced and promoted businesses including personal pension products, commercial pension products, and pension annuity insurance. To advance the development of the third pillar of the pension system, CIB recorded 6.2745 million personal pension accounts, ranking high in the industry.
Promoted digital finance business. During 2024, CIB integrated “Digital CIB” with digital finance, and improved the digital operation level. The number of MAUs of mobile banking increased by 18.26% year on year; the number of CIB Steward customers grew by 10.56% year on year; the number of registered customers of CIB Living rose by 14.59% year on year; the number of registered users of Qianda Money Manager increased by 9.10% year on year; and the number of registered users of CIB Inclusive Finance surged by 115.81% from the end of the previous year.
1.“1234” strategy: 1:Light assets, light capital and high efficiency are the main lines of development; 2:Take the strategy of “commercial bank + investment bank” as the starting point, and adhere to the development philosophy of “customers as the foundation, commercial banking as the carrier, and investment banking as the functional arm”; 3:Continuously improve the capacity building of settlement banks, investment banks and transaction banks; 4:Strengthen the strategic roles of key branches, key industries, key customers and key products
2.Three Business Cards: green banking, wealth management banking and investment banking
3.Five New Arenas: technology finance, inclusive finance, energy finance, auto finance, industrial zone finance
4.FPA of large investment banking：During the reporting period, the Company focused on providing customers with solutions for diversified financial demands, effectively integrated the advantages across the Group and established the FPA of large investment banking, including bond underwriting, bond investment, M&A loans, syndicated loans, capital market and equity investment and other investment banking products