Class of 2019: CCB

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The Chinese bank is making a big push in areas such as financial inclusion as it targets sustainable ways to build its business and support the Chinese economy.

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Safe as (leased) houses

The Chinese bank is making a big push in areas such as financial inclusion as it targets sustainable ways to build its business and support the Chinese economy

China Construction Bank is in the middle of a new strategy designed to position it for sustainable growth. Chairman Tian Guoli has three priorities: house leasing, inclusive finance and fintech. To that could be added the ambition the bank has shown in private banking, both domestically and overseas.

CCB’s point of difference in house leasing is what it calls an open-source ecosystem – “to reinstate the original purpose of financial and housing markets.” 

The idea is to build an integrated service platform that, today, covers 94% of cities at prefecture level or above, and so far has had over 17 million online listings and the same number of registered individual users. 

In inclusive finance, a host of new products has been launched. Mingonghui, for example, focuses on migrant workers and has so far been used by 1.44 million of them; the accumulated loan balance is Rmb15 billion ($2.1 billion). Rapid loans or small and micro businesses totalled Rmb479.9 billion at the half-year results. 

Inclusive finance loans through the bank’s network supply chain grew 76.21% year on year, while a new app called Huidongni has already got over 1.8 million users. 

Perhaps the most interesting part of the financial inclusion effort is the Yunongtong service, which seeks to implement rural financial reform. There are 224,000 outlets for this service, intended to build what the bank calls smart rural areas. Overall, between the end of 2018 and June 30, 2019, inclusive finance loans grew 36.23%, to Rmb831.1 billion. 

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Tian Guoli

Finally, on fintech, CCB has rolled out a range of initiatives, from public cloud services to blockchain applications, big data to smart government affairs platforms and business matchmaking to AI applications. 


On the private banking side, CCB has over 1,800 wealth management consultants and account managers serving clients through more than 300 wealth management centres in China, Hong Kong, Macau and Singapore. At the end of 2018, it served 127,000 wealthy clients with Rmb1.35 trillion in assets under management, leading the domestic sector.

Liu Jianzhong, general manager in charge of wealth management and private banking, runs this ambitious operation and has shown a willingness to listen to the market, commissioning benchmark studies of client attitudes and adapting the business accordingly. Recent focuses include advice on family trusts and health programmes. 

While all these initiatives are being developed, the bank’s numbers remain strong. First-half numbers showed a 5% increase in assets, 5.4% in net loans and advances, 6.5% in deposits, 11.2% in net fee and commission income and 5.6% in net profit over the end of 2018. 

CCB is not immune from expectations that the big four banks should support national priorities; in many respects, it has embraced that burden more than the others. It is the only one to have made a meaningful contribution to the debt-for-equity swaps that the state hoped would help clean up bad debts, having undergone Rmb180 billion of them so far. 

Like ICBC, it has supported the development of Beijing, Tianjin and Hebei, including the Xiong’an New Area, as well as the Greater Bay Area and the Yangtze River Delta, all national priorities. It now has Rmb219.4 billion of lending committed to the Yangtze Economic Belt alone, for example, up 8.06% in the first half of 2019; Greater Bay Area lending rose 15.5% in the same period.

Its rural revitalization initiatives should be seen in the spirit of nation-building; it has Rmb1.8 trillion of agricultural loans outstanding and has given Rmb195.5 billion of poverty alleviation loans.

Also like ICBC, when CCB proudly announces its work to build the nation, it spends just as much time explaining how it has built up its risk-management capabilities. Given the bank’s focus on real estate, its understanding of property risk is particularly important. 

A close look at its books shows that the proportion of loans to tier-one and two cities is increasing, while non-performing loans in property development lending had fallen Rmb830 million in the first six months of 2019. 

CCB has more to say about its international strategy this year than ICBC. The bank now has a considerable global presence, operating through 215 institutions in 30 countries and regions, most recently adding Astana, Kazakhstan to the mix. 

The internationalization of the renminbi is a key opportunity, and although Bank of China has tended to get the most credit in this area, the total renminbi clearing volume in London handled by CCB exceeded Rmb36 trillion, according to the half-year 2019 results. Its total contracts under the Belt and Road Initiative overseas reached $21.74 billion in the same period. 

The bank also stands out for using blockchain for trade-finance platforms, passing Rmb300 billion of transaction volumes in the first half. It has launched a cross-border fast-loan product and is now the first custody bank to offer cross-border stock connect services between Shanghai and London.