In celebration of its 36th anniversary, China's Industrial Bank (CIB) released its Half-Year Report 2024 on the evening of August 22. In the first half of the year, guided by the top priority of pursuing high-quality development, CIB has aligned its strategic goals with China's national priorities and proactively built a market-recognized, value-oriented bank with its distinctive characteristics.
As of June 30 2014, CIB's total assets amounted to RMB 10.35 trillion, up by 1.89% from the end of the previous year. Operating income reached RMB 113.043 billion, up 1.80% year on year, with net interest income increasing by 4.22% to RMB 74.891 billion and the decline in net interest margin narrowing compared with the first quarter. Non-interest income increased by 8.7% to RMB 25.407 billion. Net profit attributable to equity holders of the parent was RMB 43.049 billion, an increase of 0.86% year on year. Both operating income and net profit growth rates returned to positive territory. The non-performing loan (NPL) ratio remained stable at 1.08% and the provision coverage ratio was 237.82%, indicating overall stable asset quality.
In addition to improving its financial performance, CIB's market position and brand image were further strengthened. It remains listed in the Fortune Global 500 and is ranked 16th in The Banker's 2024 Global Top 1,000 Banks list. The bank also received the "National Labor Award" from the All-China Federation of Trade Unions and was named "Bank of the Year - China" for 2023 by The Banker magazine.
Aiming for a Value-Oriented Bank
Continuously Enhancing the "Five Core Capabilities"
In the first half of the year, CIB focused on enhancing its five core capabilities: strategic execution, customer service, investment and trading, comprehensive risk management, and internal management capabilities. These efforts are aimed at reinforcing its strengths, consolidating its foundations and addressing its weaknesses in order to promote high-quality development.
- Strengthening strategic execution capabilities. CIB adhered to a development strategy of "light assets, light capital, and high efficiency", focusing on reducing deposit costs, optimizing loan structure, and expanding intermediation revenues.
In terms of deposits, CIB focused on "stable growth" and "cost optimization". CIB targeted the expansion of low-cost transactional deposits as a key to the high-quality liability development. It also optimized the structure of deposits and reduced interest expenses by replacing maturing high-cost deposits and discontinuing manual interest additions. Total deposits reached RMB 5.39 trillion, an increase of 4.85% from the end of 2023, with the deposit interest rate decreasing by 20 basis points to 2.06%.
In terms of loans, CIB focused on "stable disbursement" and "optimal allocation". CIB deepened its "regional + industry" approach, driving growth in key sectors such as green finance, technology finance and inclusive finance, where corporate loan balances grew by 13.13%, 9.25% and 16.54%, respectively, compared with the end of last year. Personal business loan and consumer loan balances (excluding subsidiaries) grew by 5.66% and 5.67%, respectively, from the end of last year. The share of loans (bank loans excluding bills) at branches in key regions increased to 57.16%.
In terms of the intermediary business, CIB focused on "strengthening competitive advantages" and "unlocking new potential". CIB maintained its competitive edge in wealth management, custody and investment banking. CIB Wealth Management's average daily assets under management (AUM) reached RMB 2.3 trillion, growing by 4.92% from the end of 2023. Custody assets totaled RMB 16.30 trillion, offering the second most products in the market. Non-financial bond underwriting ranked second in the industry, with M&A and syndicated loan volumes increasing by 32.16% and 50.88% year on year, respectively. CIB also achieved significant growth in light capital businesses such as fixed income, currencies, and commodities (FICC), generating RMB 1.72 billion in revenue from foreign exchange and precious metals derivatives trading.
- Enhancing customer service capabilities. CIB enhanced its customer service systems by focusing on customer segmentation, product cross-selling, and scenario-based financial services to drive acquisition, retention, and engagement.
CIB's retail customer base exceeded 104 million, growing by 3.2% year on year.The number of VIP and private banking customers grew by 3.75% and 7.16% respectively. The number of corporate clients grew by 4.96% from the end of 2023 to 14.708 million, with the number of corporate clients classified as "potential" or higher increasing by 8.17%. CIB's cooperation coverage rate with domestic interbank clients remained above 95%.
- Strengthening investment and trading capabilities. CIB continued to build on its strengths in financial markets, optimizing on-balance sheet investments and expanding off-balance sheet asset management.
On the balance sheet, CIB improved its investment allocation, enhanced its research-driven decision-making and execution mechanism, and strengthened its bond banking and FICC banking capabilities.
In asset management, CIB strengthened the professional capabilities of its subsidiaries. CIB Wealth Management maintained its market leadership, ranking first in the PY Standard Comprehensive Wealth Management Ranking for 26 consecutive quarters, and was ranked 83rd in the IPE Global Top 100 Asset Managers 2024. Compared with the end of last year, the size of CIB Fund Management's mutual funds increased by 20.8%, and CIB International Trust's AUM grew by 51%.
- Strengthening comprehensive risk management capabilities. CIB focused on risk management with a bottom-line mindset, prudently preventing and mitigating risks in key areas, controlling risk costs, and continuing to focus on the recovery and disposal of non-performing assets.
In the real estate segment, the NPL ratio for real estate loans was 3.65% with a provision coverage ratio of 4.95%. More than 80% of real estate loan balances are concentrated in first-tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen, provincial capitals and economically developed cities (GDP over RMB 1 trillion) with stable real estate markets, indicating manageable risk.
In the local government financing platform segment, the outstanding debt of local government financing platforms was RMB 151.643 billion, down RMB 9.948 billion from the end of last year. This debt is concentrated in the economically strong and fiscally resilient eastern and central provinces.
In the credit card segment, the NPL ratio was 3.88%, down 0.05 percentage points from the end of last year, while the delinquency rate decreased 0.23 percentage points to 6.52%. The amount of overdue loans, a forward-looking risk indicator, decreased by 12.65% year-on-year.
In the emerging segments, CIB continued to strengthen its research capabilities and enhance risk management through technology empowerment, driving the digital transformation of risk management and accelerating the iterative improvement of its technology-enabled scoring systems. As a result, NPL ratios in technology finance, inclusive finance, energy finance and auto finance were exceptionally low at only 0.44%, 0.92%, 0.24% and 0.27%, respectively, all lower than the average corporate NPL ratio.
- Strengthening internal management capabilities. CIB has made significant progress in its internal management, driving digital transformation, and seeking to capitalize on system reform and business transformation.
First, CIB has implemented transformations in three key areas: standardized transformations in management, systematized transformations in marketing, and digital transformations in operations. These initiatives were aimed at improving core management capabilities, with a focus on strengthening frontline staff, basic systems, and operational management - empowering frontline staff and reducing operational burdens.
Second, CIB has accelerated its pace of going digital, moving from an early preparatory stage to a mature stage poised to deliver remarkable results. CIB has made initial progress in building a comprehensive digital CIB system, which consists of "1 (mobile banking) + 5 ("Industrial Inclusive Finance", "Industrial Steward", "Industrial Living", "Qianda Money Manager" and "Bank-to-Bank Platform") + N (diversified ecological scenarios)", with the five online platforms continuing to grow in customer numbers and business volume. CIB actively promoted the development of scenario-based ecosystems, integrating financial services into various scenarios. By opening 2,228 banking API interfaces, which represented an increase of 14.79% from the end of the previous year, CIB facilitated access for 9,412 institutions. CIB also upgraded its digital RMB product line, issued 8 million CIB wallets and signed 125 digital RMB partner banks.
Deepening the Integration of "Three Business Pillars" with "Five New Finance Sectors" and "Five Major Topics" in Line with China's Economic Transition
In the first half of 2024, guided by the spirit of China's Central Financial Work Conference, CIB closely aligned its strategies with China's national priorities, with a particular focus on sectors critical to the transformation of China's real economy, including those identified in the government's "Five Major Topics". These sectors, together with the bank's "Three Business Pillars" and "Five New Finance Sectors", serve as critical drivers for the development of new quality productive forces and high-quality economic growth.
In terms of green banking, the number of CIB's green financing customers increased by 11.70% from the end of last year to 65,000 as of June 30, with the green financing balance increasing by 12.45% to RMB 2.13 trillion. In particular, CIB's green loan balance, according to the People's Bank of China metrics, was RMB 915.1 billion, a 13.11% increase from the end of last year, with a NPL ratio of only 0.36%. In addition, CIB has made progress in integrating green finance into key areas such as technology finance, inclusive finance and pension finance. Through its "Green + Technology" financing approach, CIB supported the growth of green technology enterprises. It provided financing to 31,100 technology finance customers in green sectors, with a green financing balance of RMB 729.765 billion, an increase of 9.05% from the end of last year. Through its "Green + Inclusive" financing initiative, CIB introduced innovative green financial products such as "Distributed Photovoltaic Loan", "Easy Tea Loan" and "Forestry Share Certificate Loan" to support small and micro enterprises (SMEs) as well as agriculture, rural areas and farmers. In addition, CIB's "Green + Pension" financing model offered tailored green financing solutions for the medical and healthcare sector, addressing the needs of an aging population.
In terms of wealth banking, CIB's wealth management product suite grew to nearly 20,000 products by the end of June. The Group's retail AUM reached RMB 4.88 trillion (including the market value of third-party custody assets), and the average daily corporate wealth AUM grew by 11.8% year on year to RMB 416.4 billion. The sales balance on CIB's bank-to-bank platform exceeded RMB 600 billion, up 72.61% from the end of last year. CIB continued to leverage its wealth management business to align financing with the real economy, particularly supporting the technology, green, elderly care and digital sectors. As China's population continues to age, CIB has also stepped up its efforts to introduce more innovative pension wealth management products and improve services for elderly customers. It already offered more than 170 private pension products, one of the most in the industry, and managed comprehensive financial assets of RMB 1.83 trillion for customers aged 50 and above, up 4.76% from the end of last year.
In terms of investment banking, the finance product aggregate (FPA) amounted to RMB 4.43 trillion as of June 30, an increase of RMB 49.7 billion over the end of last year. CIB maintained its market-leading position in key areas such as bond underwriting, M&A financing, and asset matching, with quasi-REITs products and non-financial bond underwriting ranking first and second in the market, respectively. Its M&A, syndicated loans and capital markets maintained strong growth momentum. At the same time, CIB actively leveraged its "commercial bank + investment bank" advantages to serve the "Five Major Topics". Its investment banking business has served a significant number of technology finance customers, whose financing balance reached RMB 568.3 billion, up 22.11% from the end of last year. Green investment banking services reached RMB 126.636 billion, of which green non-financial bond underwriting accounted for 10.52% of the market share, ranking first among China's joint-stock commercial banks.
Strengthening the "Three Business Pillars" remains a key strategy for CIB to support the "Five Major Topics", which in turn helps it explore new growth opportunities in emerging financial sectors.
In technology finance, CIB has served 165,400 customers with a loan balance of RMB 903.515 billion, up 9.25% from the end of last year.
In inclusive finance, the loan balance of SMEs reached RMB 548.528 billion, up by 9.49% from the end of last year, while agricultural loans totaled RMB 727.127 billion, up by 9.38% from the end of last year.
In energy finance, the corporate financing balance was RMB 847.512 billion, a growth of 12.16% over the end of last year, with both technology and green finance customers accounting for 56%, showing a notable trend towards "new" and "green" industries.
In automobile finance, the corporate financing balance was RMB 422.342 billion, a growth of 7.27% over the end of last year, with technology and green finance customers accounting for 63% and 46%, respectively.
In industrial zone finance, the corporate financing balance was 2.24 trillion yuan, a growth of 10.74% over the end of last year. Financing for technology and green finance customers accounted for 40% and 31%, respectively, becoming key drivers in supporting the "Five Major Topics" and facilitating the development of high-quality productive forces.
2024 marks both the 75th anniversary of the founding of the People's Republic of China and the 36th anniversary of CIB. As the bank continues to embrace the political and people-oriented responsibilities of the financial sector, it will contribute to China's comprehensive reform process and firmly position itself to achieve its goals of becoming a value-oriented bank with strong profitability, close customer relationships, low risk cost, balanced business structure and distinctive operational characteristics. CIB will write its chapter in China's path to modernization by promoting high-quality development in the banking sector with a uniquely Chinese approach.