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Positive Returns: 2018 half-yearly profit driven by innovation and reform

In a complex and volatile environment, China Construction Bank’s 2018 half yearly operating results showed steady growth, stable asset quality, a high capital adequacy ratio and a strong focus on fintech, housing and CSR.
CCB: Growth and stable governance
CCB: Growth and stable governance

China Construction Bank (CCB) Corporation’s first half of 2018 (H1) results show stable governance has created moderate growth driven by a focus on compliance, fintech, innovation and the successful uptake of new products such as credit cards and corporate settlements.


For CCB, H1, 2018’s highlights include growth and stability. The bank’s total assets reached Rmb22.81trillion ($3.3 trillion), up by Rmb680.80 billion from the end of the last year, representing a year-on-year increase of 3.08%. Net profit rose 6.08% year-on-year with annualised return on average assets and annualised return on average equity being 1.31% and 16.66% respectively. The non-performing loan ratio fell 0.01 percentage points to 1.48% during this six-monthly return. Pre-tax profit increased by 5.42% year-on-year with net profit rising by 6.08% over the same period last year.

Moderate growth was achieved through interest-generating assets and net interest income increased by 9.93% for the same period last year as a result of loan mix optimisation and improved pricing capability. Net income from fees and commissions remained stable, and demand for new products such as credit cards and corporate settlements grew rapidly.

CCB customer deposits increased 3.68% from the end of last year with deposits from domestic companies rising by 3.32% in the six months from December 2017, while individual deposits increased by 5.17% during this time.


Loans continue to be a source of steady growth for the bank. In order to support economic development, CCB increased loans and advances to customers by Rmb494.01 billion (3.93%) in the first half of 2018. When adjustments based on the new financial instrument standards are considered, this increases to 4.05%.

In the first half of 2018, loans to support infrastructure development increased by 3.97% and accounted for 52.55% of the bank’s total loan balance. During this time, the bank implemented strict list management, with a loan balance of Rmb127.98 billion for serious overcapacity industries and a loan balance of Rmb360.12 billion for real estate development, in order to support high-quality real estate clients and ordinary commodity housing projects.

Earlier this year, CCB took the lead ahead of other big commercial banks in China, and established the first risk measurement centre, to act as an early warning platform while also improving the effectiveness of the risk monitoring. As of the end of June 2018, the bank’s non-performing loan balance moved fractionally downwards by 0.01 percentage points.


Economic reform is an important part of the bank’s agenda with a focus on supply-side structural and economic reforms, including credit structure adjustment and social development.

In partnership with the National Development and Reform Commission, the CCB actively promoted the setting-up of a national strategic emerging industry development fund. Using bonds and asset securitisation, Rmb17.94billion of funds were channelled into the housing rental market. Tapping into a new frontier of market-driven financing for debt-to-equity swap projects, the bank raised capital by issuing its first notes backed by debt-to-equity swap assets in China’s inter-bank market.

To support the green economy, CCB is leveraging its position as an exclusive lead underwriter providing green asset-backed note issuance services to customers in the green financial reform and innovation pilot areas, by issuing the first green construction panda bond and green bonds in the inter-bank market. During the H1 reporting period, total registered green bonds reached Rmb11.80 billion.


Fintech innovation is a key driver of CCB’s future growth with a focus on fintech, financing and home leasing. As a state-owned enterprise (SOE), the bank is a market leader in housing leasing and housing rental solutions, through its housing rental service platform. The bank is working with government and other enterprises to create a rental community and has also launched the first housing rental price index. To date, it has home leasing agreements with more than 300 cities, at prefecture level and above, and 243 cities have been equipped with the online platform. CCB cooperates with nearly 1,500 enterprises in the leasing market and its platform has more than 350,000 apartments online, of which nearly 90,000 are leased.


In an effort to drive technological innovation the bank has developed a five-year fintech strategy and established the CCB Fintech Company, as well as a number of social platforms to promote initiatives such as smart governance and community services.  

The combination of fintech and finance is proving to be a winner for CCB. For example, the bank strategically supports small industries and small enterprises by leveraging the fintech strength of its “New Generation” core banking system with its products such as Quick Loans for SMEs, cloud tax loans, collateralised fast loans and account. Demand for these services has resulted in nearly 300 new small business operation centres and more than 1,500 individual credit centres being created. As of the end of June, the balance of inclusive financial loans represents a year-on-year increase of 44.33% of 868,500 customers, a year-on-year increase of 383,400 people.


CCB believes corporate and social responsibility contributes towards a caring society. Adhering to the concept of “openness, sharing and being responsible”, CCB proactively seeks to solve social challenges with its financial strength. In the first half of 2018, the bank created more than 14,000 “Caring Stations” in its outlets, to support those carrying out community services and those in need.


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