Awards for Excellence 2009: China

China’s banks have had a good crisis, with the main threat to their success coming from a need to diversify their revenues away from interest margin rather than from the huge losses on investments that have bedevilled financial institutions elsewhere. Deciding which of China’s banks is strongest is difficult. Last year’s winner of this award, ICBC, is still in good shape; while CMB, arguably the strongest among its peers in generating fee income over the past couple of years, loses out on suspicion it overpaid for its acquisition of Wing Lung Bank in Hong Kong and because analysts think its strong recent performance has peaked. China Construction Bank, however, has been a consistent if less adventurous performer over the past 12 months and is a deserving winner. In 2008, the bank’s net profit grew 34% to Rmb92.6 billion ($13.5 billion), while the proportion of net fee and commission income to operating income rose slightly to 14.3%. The bank claims the lowest non-performing loan ratio among its peers, and has worked hard to manage asset quality through a programme of securitizing non-performing assets. Analysts praise its strong deposit base, consistent growth and efforts to transform its retail branches.