China Construction Bank
- April 2, 2018
- Posted by: admin
- Category: Funding trends
China Construction Bank Corporation (CCB) is a leading commercial bank and one of the “big four” banks in the People’s Republic of China. Its headquarters are in Beijing.
The Bank’s market capitalisation reached US$191,889 million at the end of 2020. CCB ranks fourth among all listed banks in the world and the Group ranks second among global banks by Tier 1 capital.
It serves hundreds of millions of personal and corporate customers and has 14,741 branches and 349,671 employees.
The Bank has subsidiaries in different sectors, including fund management, trust, insurance, futures, financial leasing, pension and investment banking.
It has more than 200 overseas entities and operates in 31 countries and regions.
The History of China Construction Bank
China Construction Bank’s history dates back to 1 October 1954 when the People’s Construction Bank of China was founded. This became a financial institution in 1979 under the direction of the State Council, and became a full-service commercial bank after the China Development Bank in 1994 was established. It changed its name to China Construction Bank in 1996.
The Bank became a separate legal entity owned by the Chinese government holding company (Central Huijin Investment Company) after the China Banking Regulatory Committee’s approval in September 2004.
In 2015, China Construction Bank ranked second in Forbes’ 13th annual Global 2000 ranking of the biggest, most powerful and most valuable companies worldwide.
In 2005, the Bank’s H-shares were listed on Hong Kong Stock Exchange. The Bank’s A-shares were listed on Shanghai Stock Exchange in 2007.
Investment by Bank of America
In 2005, Bank of America bought a 9% stake in China Construction Bank for US$3 billion.
Bank of America bought 6 billion H-shares for approximately HK$2.42 per share in June 2008.
In May 2009, there was speculation that US$7.3 billion worth of shares had been sold by Bank of America after being ordered to raise more capital following the results of the Dodd-Frank Act Annual Stress Test.
Bank of America sold approximately half of its shares in the Bank (13.1 billion shares worth about US$8.3 billion) to an undisclosed group of investors on 29 August 2011.
In 2013, Bank of America sold their remaining shares in the China Construction Bank for around $1.5 billion.
In 2006, China Construction Bank acquired Bank of America (Asia) and established a London office on 2 June 2009.
In 2008, China Construction Bank applied to the New York State Banking Department and the Federal Reserve Board to set up a branch in New York City. The Bank officially opened its New York branch on 6 June 2009.
China Construction Bank also opened its European Headquarters in Luxembourg in 2013.
In addition, CCB Indonesia was founded by the merger of Bank Windu Kentjana and Bank Anda in 2016.
The investment division of China Construction Bank started a CN¥5 billion (US$731.3 million) China Healthcare Investment Fund to invest in China’s fast growing healthcare sector. It is the first domestic investment fund to specialise in investments in China’s healthcare industry and focuses on investments in healthcare sectors including pharmacy, medical equipment manufacturing, medical institutions and services.
China Construction Bank is committed to practising “New Finance”
The Bank is dedicated to practising “New Finance” and promoting the implementation of the three major strategies of house rental, inclusive finance and FinTech. By following the digitalised operation strategy of “building ecologies, setting up scenarios and expanding user base”, the Bank aims to achieve a breakthrough at the Customer Community by providing a warm and friendly service for ordinary people. Furthermore, the Bank focuses on empowering the Business Community to create an ecology of co-existence and co-prosperity and become a full-life-cycle partner of its corporate clients. In addition, it promotes its connection with the Government Community, striving to support social governance to become a national trusted financial pillar.
Its business concept is “market-oriented, customer-centric” and the Bank is committed to developing itself into a world class banking group capable of creating high value. It strives to integrate short-term and long-term benefits and combine business goals and social responsibilities objectives to maximise the value for its stakeholders including customers, shareholders, associates and society.
China Construction Bank posts 2.8% increase in 2021 Q1 profit
China Construction Bank reported a 2.8% increase in first-quarter profit as China’s recovery from the COVID-19 pandemic accelerated and moved demand for credit in the world’s second-largest economy.
China Construction Bank and other big state-run banks have benefited as economic activity recovers from the coronavirus pandemic. Lending still makes up a big proportion of their earnings, compared to their western peers, many of which have investment banking and securities trading businesses.
This has meant that the Chinese lenders have not been able to gain from the trading bonanza derived by Wall Street banks in the first quarter. But the Chinese banks have begun to pull back on their lending over Beijing’s concerns about exuberance in sectors such as property.
The vice chairman of the China Banking and Insurance Regulatory Commission (CBIRC) has warned that banks should be prepared for pressures from a rebound of bad loans as adjustments to domestic and global supply chains are expected to bring about some defaults on debts.
In Q1 of this year the banking industry in China had a 1.5% year-on-year profit growth, whereas the bad loan ratio fell to 1.89% from 1.92% at the end of 2020, CBIRC said earlier in April 2021.
The non-performing loan (NPL) ratio of China Construction Bank was 1.56% at the end of March, flat from three months earlier.
Total bad loans increased to 274.3 million yuan from 260.7 million yuan at the end of 2020.
- Growth through innovation/creativity:
Rather than be constrained by ideas for new products, services and new markets coming from just a few people, a Thinking Corporation can tap into the employees.
- Increased profits:
The corporation will experience an increase in profits due to savings in operating costs as well as sales from new products, services and ventures.
- Higher business values:
The link between profits and business value means that the moment a corporation creates a new sustainable level of profit, the business value is adjusted accordingly.
- Lower staff turnover:
This, combined with the culture that must exist for innovation and creativity to flourish, means that new employees will be attracted to the organization.