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Public company info - Chongqing Rural Commercial Bank Co. Ltd. - H Shares , 03618.HK
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Chongqing Rural Commercial Bank Co. Ltd. - H Shares, 03618.HK - Company Profile
Chairman LIU Jianzhong
Share Issued (share) 2,513,000,000
Par Currency Renminbi
Par Value 1.0
Industry Banks
Corporate Profile Business Summary: The principal activities of the Group is the provision of financial services, which includes deposits taking, lending, payment settlement services, financial leasing and other services as approved by the CBRC. Performance for the year: In 2019, the net income of the Group amounted to RMB9,988 million, representing the increase of RMB824 million or 8.99% over the same period of the previous year; the operating income was RMB26,642 million, representing an increase of RMB509 million or 1.95% over the same period of the previous year; the net interest income amounted to RMB23,291 million, representing an increase of RMB3,277 million or 16.37% over the same period of the previous year; the net non-interest income amounted to RMB3,352 million, among which the net fee and commission income amounted to RMB2,322 million, representing an increase of RMB256 million, accounting for 8.72% of operating income, an increase of 0.82 percentage point. Business Review (I)Retail business highlights The Bank proposed the strategy of “establishing banks with retail”, which is an advantage and a general trend. Under the strong market foundation of the Bank, the retail business had a solid foundation and a strong base to seize the market and achieve quality improvement and efficiency increment. In 2019, the income of retail business was RMB9,929 million, representing an increase of RMB212 million year-on-year, accounting for 37.27% of the Group’s operating income, ranking first in the Group’s operating income for three consecutive years. Total profits were RMB5,299 million, representing an increase of RMB313 million yearon-year, accounting for 43.32% of the Group’s total profits, ranking first in the Group’s total profits. In 2020, the Bank promoted the “six-type strategies” to achieve “six outcomes”, that are: developing customerisation to ensure the customer-centered philosophy “has a specific focus”; monopolising business to ensure the large retail business “has a unique system”; intelligentising tools to ensure refined management “has a strong support”; scenarising network to ensure “having a good experience” in the Yukuai Living Spheres (渝快生活圈); professionalising personnel to ensure “competitiveness” when competing market peers; implementing branding to ensure “having the best reputation” in the Chongqing’s retail market, so as to promote a continuous steady growth in the retail business. (II)Small and Micro Enterprises Businesses with Distinctive Features The Bank constantly increased its technological support, continuously innovated small and micro online service products, and kept optimising the loan process for small and micro businesses. Also, combining with the advantages of its own wide coverage of networks and a large number of personnel, the Bank accelerated online and offline “double drives”, and fully promoted the small and micro businesses with distinctive operations and high-quality development. As of the end of 2019, the number of inclusive small and micro enterprise loans of the Bank1 amounted to 123,656, representing an increase of 700 over the beginning of the year. The outstanding loan balance amounted to RMB65,195 million, representing an increase of RMB8,815 million or 15.63% as compared to the beginning of the year, in addition to 1.35 percentage points higher than the average loan growth rate of the Bank. In 2019, the average interest rate of new inclusive small and micro enterprise loans was 6.20%. The comprehensive costs of small and micro enterprise loans and the asset quality of loans were controlled at a reasonable level, achieving the regulatory goal of “two increases and two controls”2. The number and balance of inclusive small and micro enterprises accounted for 29% and 26% of the loans across the whole city, respectively, and remained the first in the city. The CBIRC Chongqing Office awarded the Bank “Outstanding Bank for Small and Micro Enterprises Financial Services” and “Excellent Bank for Internal Management Innovation”. (III)Steady Growth of Corporate Business 1.Corporate Business During the Reporting Year, the Group promoted the corporate business appropriately, prudently, and steadily in accordance with national macro-economic adjustment and control, external regulatory policies, and regional economic operations, and in accordance with the principles of legal compliance and commercial sustainability. In 2019, the Company’s operating income was RMB8,583 million, accounted for 32.22% of the Company’s business revenue. 2.Institutional Business As the first A-share listed corporate bank in Chongqing area, the Bank continued to strengthen the construction of cooperation channel with functional departments of the Chongqing Municipal Government, the financial industry and institutions at different levels. Through businesses such as social security fund issuance, treasury cash management, government bond underwriting, non-tax business collection, pre-sale fund supervision, project capital supervision, supervision on migrant workers wage deposits, the Bank maintained close cooperation with 32 municipal agencies, including the Chongqing Municipal Finance Bureau, Human Resources and Social Security Bureau and Housing and Construction Committee. It practically strengthened financial services in the field of medical security by levying basic endowment insurance for urban and rural residents and cooperative medical insurance for urban and rural residents through exclusive taxation. In addition, the Bank actively established collaboration platforms in respect of insurance and securities with other banks. The increasing abundance of collaboration channel effectively facilitated continuous stable development of the Bank’s corporate banking business. 3.International Business The key indicators for international business fluctuated slightly, the overall development situation performed well. In 2019, the international settlement amounted to USD6,664 million (including cross-border settlement of RMB4,460 million), representing a year-on-year decrease of 2.10%, foreign exchange settlement amounted to USD2,496 million, a year-on-year decrease of 14.26%, the on-balance-sheet and off-balance sheet trade financing balance and foreign currency loan balance amounted to USD1,467 million, representing a decrease of USD33 million as compared to the beginning of the year. The number of foreign exchange customers of the Bank reached 1,125, representing an increase of 68 customers from the beginning of the year, and 424 of which were active customers, representing an increase of 64 from the beginning of the year. Transaction volume of foreign exchange transaction ranked the first among local corporate banks in Chongqing, of which the transaction volume of foreign currency interbank borrowings was USD12,313 million, representing a yearon-year decrease of 26.17%. the transaction volume of interbank foreign exchange swaps and foreign exchange settlements amounted to USD3,935 million, representing a year-on-year increase of 34.39%. The interbank collaboration was further enhanced. The Bank has established correspondent banking relationship with 572 banks at home and abroad and has obtained USD8,900 million, of financial institution credit at home and abroad. Derivatives counterparties increased to 27, overseas disbursement counterparties increased to 35 and forfeiting counterparties increased to 35. (IV)Solid Development in Financial Market Operations 1.Overview of inter-bank business (1)Continued to enhance market influence of the Bank During the Reporting Period, the Bank was the only Primary Dealer of Open Market Business in Western China. The Bank had been classified as the Core Dealer of Credit Risk Mitigation by the National Association of Financial Market Institutional Investors and participated in 3 credit risk mitigation warrant investments, being one of the 57 financial institutions that obtained the qualification. During the Reporting Period, the Bank had been recognized“Active Interbank Trader of Domestic Currency” (銀行間本幣市場活躍交易商), “Active Interbank Dealer in the Money Market” (銀行間貨幣市場活躍交易商), “Active Interbank Dealers of X-Repo” (銀行間質押式逆回購匿名點擊業務活躍交易商) for the year”. (2)Continued to improve structure of assets and liabilities of the Bank and strengthen its interactive linkage with other businesses In terms of asset management, the Bank integrated the latest regulatory trends and requirements. By conducting analysis and making judgement of the macroeconomy, capital cost and market condition, the Bank gradually increased its investment in standardized assets e.g. bond and followed the market trend of making standardized investment during the Reporting Period. In the meantime, the Bank had accelerated the process of turning offline services to online and steadily commenced co-exist services. During the Reporting Period, co-exist services online and offline had been well-established, the assets structure of financial institutions was therefore optimized. In terms of liabilities management, the Bank consolidated good cooperative relations with financial institutions by various channels with businesses such as issuance of interbank certificates of deposit, interbank deposits and collateralised securities repurchase, the Bank obtained stable sources of capital. It kept optimising the liability structure and reduced costs of debt while ensuring adequate liquidity. In 2019, the average cost rate of issuance of interbank certificates of deposit was 3.36%, representing a decrease of 103 basis points as compared to 2018. In terms of business coordination, the Bank deeply implemented the 3-in-1 business development philosophy of “investment banking + custody + investment”, effectively promoted the business coordination between various departments of the headquarter and the joint marketing between the headquarter and branches, continuously optimised the internal joint competitiveness to further improve customer viscosity and loyalty. (3)Continued to optimise internal control system of the Bank The Bank improved its systematic procedures, laying a solid foundation for maintaining business compliance. In order to prevent any risks occurred in the course of business development, the Bank, from front to back offices, continued to strengthen its risk assessment and prevention, following the financial market business approval requirements which focused on both internal and in-line approval. 2.Segment Assets As of 31 December 2019, the total size of operating assets was RMB609,113 million, of which the financial investments1 amounted to RMB376,775 million; cash and balances with Central Bank to RMB77,414 million; deposits and placements with banks and other financial institutions to RMB146,001 million; discounted bills to RMB7,543 million. 3. Assets Management Business The Bank firmly promoted the transformation of wealth management business according to the new regulatory requirements. First, the Bank strengthened product innovation and launched cash management net worth wealth management products, steadily gaining market recognition. Second, the Bank orderly depressed the scale of old products and continued to optimize the structure of product, intensifying efforts for the net-worth transformation. Third, the Bank further streamlined its level, comprehensively improved its operation procedures and upgraded the transformation of technology system according to the new regulatory requirements. Forth, the Bank improved wealth management information disclosure, strengthened its valuation and investment capacities, enhancing liquidity management. Besides, the Bank actively implemented risk prevention, so as to facilitate its sustainable and stable development. By the end of 2019, the outstanding balance of wealth management products amounted to RMB134,432 million, representing an increase of RMB9,331 million or 7.46% over the end of the previous year, among which, the outstanding balance of net-value financial management products amounted to RMB70,762 million and accounted for 52.64% of total outstanding balance of wealth management products, representing an increase of RMB60,436 million as compared to the previous year. 4. Investment Banking Business Acted as the lead underwriter The first case of inter-bank green debt financial tools in Chongqing, the carrying interest is lower than the same type enterprise market interest level in the same period, realized supporting the green development’s new breakthrough; Independent underwriter The first domestic enterprise bond with credit risk certificate, for easing domestic enterprise financing difficulties and also effectively lowering the finance cost; participated in the issuance of 12 bonds as lead underwriter with the amount of RMB2,510 million, representing a year-on-year increase of 35.31%; participated in 20 debt financing plans with total amount of RMB5,860 million, representing a year-on-year increase of 26.84%; successfully joined the underwriting groups of local government bonds and three major policy bank financial bonds in 10 regions; participated in the issuance of 182 bonds and debt financing plans as underwriter with the amount of RMB55,936 million, representing a yearon-year increase of 73.69%; the redemption and continuation of the Bank’s 2014 tier 2 capital bonds was successfully completed with an amount of RMB5,000 million. The interest rate for subsequent issuance of new bonds is at the lowest level for tier 2 capital bonds issued by corporate financial institutions in the same period. In the meantime, the Group actively supplemented and deployed professional and technical personnel, consolidated the departmental organizational structure, promoted the first phase of the asset securitization management platform, established a departmental inspection and emergency mechanism, strengthened the quality of process management and internal control, and improved the development level of investment banking business. 5. Asset Custodial Business As of the end of the Reporting Period, the asset custodial scale was RMB142,607 million. During the Reporting Period, the Bank had not yet commenced the network lending funds custody business. During the Reporting Period, no material custody risk events occurred in the Bank. (V)Accelerated Financial Technology Innovation 1. Implement all-round talent-driven, lead the technological innovation 2.Independent development of products, and deep integration of online and offline 3.Launched “Chongqing Rural Commercial Cloud”, and continued to build an intelligent cooperation and open platform 4.Constructing risk control system with perfect credit life cycle 5.Establishing big data platform to utilize the value creation ability of data 6.Adhering to make all-round innovative breakthroughs to build up core competency (VI)Consolidated and Enhanced Financial Business In County Area County Area is the principle base where the Group carries out Sannong financial services. The financial business in County Area has been a long-term strategic focus, and also one of the Group’s major sources of revenue. The Group provides diversified financial services for customers in County Area through 5 branches, 26 first level sub-branches, 99 secondary level sub-branches and their 1,331 distribution outlets, 2 community branch outlets as well as 12 village and township banks located in County Area. During the Reporting Period, the Group took advantage of interactive linkage between urban and rural areas (城鄉聯動優勢), deepened internal reforms, actively innovated products, and strived to enhance the financial service in County Area, all of which have led to the rapid growth of financial services in County Area. As of 31 December 2019, the loan balance of the financial business(1) of the Group in County Area amounted to RMB209,898 million, representing an increase of RMB34,117 million, or 19.41%, over the end of the previous year. In particular, the corporate loan balance of the financial business in County Area amounted to RMB91,251 million which accounted for 33.20% of the corporate loan balance of the Group, representing an increase of RMB14,955 million, or 19.60%, over the end of the previous year. The personal loan balance of the financial business in the County Area amounted to RMB118,647 million, representing an increase of RMB19,162 million, or 19.26%, over the end of the previous year, accounting for 73.13% of the personal loan balance of the Group. The deposits balance in County Area amounted to RMB466,885 million, representing an increase of RMB44,160 million, or 10.45%, over the end of the previous year. The Bank firmly developed the new development concepts, complied with the requirements of high-quality development, and supported the rural revitalization strategy as the general focus for Sannong financial services. Adhering to the general keytone of making progress while maintaining stability and based on the new industries, new business normal and new dominance in county areas, channelling of financial resources was propelled to enhance the efficiency of Sannong financial services. As of 31 December 2019, the outstanding balance of agricultural loans(2) of the Group amounted to RMB160,759 million. Prospects: In 2020, under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, not only Chongqing Rural Commercial Bank will closely follow the changes in policies and comply with the improved standards and requirements, the Bank will also focus on the strategy of “establishing banks with retail, prospering banks with technology and strengthening banks with talents”, that the Group can unwaveringly enter the new trillion journey. For establishing banks with retail, the Group keep seeing retail as a fundamental element of development and continuation. The Bank has been cultivating in county areas and serving the public for years, and the Group's outlets cover the entire Chongqing. Rooted and based in the retail market, the Group gain unsurpassed resources and advantages, that the Group remain a close distance with customers and have thorough understanding of and instant response to the changes in the market demands, which facilitate the Group's provision of quality “customer-oriented” financial service. In the future, the Group will further exercise the Group's strength which is the Group's huge customer base, with the aim of achieving establishing banks with retail through establishing banks with customers and creating an enormous, customer-centered retail system. Furthermore, the Bank will greatly enhance its assessment and guidance, earnestly spot the needs of customers, help developing customers’ habits and provide differentiated services to customers by category, by tier and by channel. Blending customers’ needs into the Group's products and services, the Group turn low viscosity customers to loyal, from inactive to active. For prospering banks with technology, the Group keep seeing technology as a booster for innovation and driver for growth. the Group exert utmost efforts to create good conditions for innovation and increase the Group's investment in financial technology, under the innovation in financial technology, the Group's operation as well as management can be facilitated in one go. Utilizing technical methods such as more intelligent and efficient counter services and platform-based application scenarios, the Group streamline services towards retail and small and micro customers. The Bank retains existing customers and attracts new customers by advanced technology. In addition, the Group has been increasing the usage of big data, by professional processing of and exploring into the customers’ data and transaction data accumulated for years, the Bank can therefore achieve “added-values” after “processing”. For strengthening banks with talents, the Group keep seeing talents as the Group's core resources and future hope. Through increasing the Group's effort in recruitment, introduction and training, offering incentives and enforcing disciplines, letting young and professional talents to experience and be responsible in multiple positions, the Group fully utilize the advantages of talents and establish a profound atmosphere in personnel selection and appointment. In addition, the Group continue the Group's market-oriented reform and seek ways to promote professional managers system which focuses on maximizing staff efficiency and performance, so as to cultivate a group of real talents and real professionals, securing human resources for the transformation of rural commercial bank.

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