21st Century Business Herald reporter Yang Xi reported from Beijing
On June 27, CCB's 2023 Annual General Meeting of Shareholders was held simultaneously in Beijing and Hong Kong. Zhang Jinliang, Chairman of CCB, presided over the meeting, which was attended by President Zhang Yi, Vice President Ji Zhihong, Vice President and Secretary of the Board of Directors Wang Bing, and Vice President and Chief Risk Officer Li Jianjiang.
At the meeting, CCB's management answered key issues of concern to shareholders, such as promoting high-quality development, operating performance and outlook for the second half of the year, intensive and refined management of capital, and interim dividends. Zhang Jinliang said that in the first half of the year, CCB adhered to the overall situation with high-quality development, maintained strategic focus, strengthened long-termism, accelerated the reform of concept, power and efficiency, and continued to maintain a balanced and coordinated key indicators such as ROA, ROE, net interest margin and capital adequacy ratio.
It is worth noting that this is also the first appearance of Zhang Yi, the new president of CCB, at the shareholders' meeting. Zhang Yi said that at present, the interest rate spread of the whole industry in the banking industry is generally declining, and the pressure on stable income and stable growth is increasing. In the second half of the year, CCB will adhere to the theme of high-quality development, do a good job in the "five overall planning", improve the "five qualities", continue to deepen the potential to increase revenue, reduce costs and increase efficiency, strive to improve the quality and efficiency of operations, maintain a stable trend of business development and profitability, and continue to create value for shareholders. "Specifically, we will focus on key tasks such as increasing revenue, reducing expenditure, and controlling risks, so as to maintain the market advantage of financial indicators." Zhang Yi said.
Accelerate the abandonment of the "scale complex"
At the 2023 annual results conference held in April this year, CCB proposed to abandon the traditional thinking of "judging heroes by scale and speed" and focus on promoting connotative development. At this shareholders' meeting, Zhang Jinliang talked about three key points. The first is to establish a correct view of management, performance and risk; the second is to deepen the supply-side structural reform of the financial sector; The third is to strengthen comprehensive, proactive and intelligent risk prevention and control.
"In terms of development orientation, we insist on quality first and efficiency first, and put structural optimization, quality and efficiency improvement, and risk management in a more important position in goal setting and assessment and evaluation. In terms of business strategy, we accelerated the abandonment of the 'scale complex', focused on the five major elements of financial statements, including assets, liabilities, capital, income and cost, and adopted a series of measures to rectify and clean up unreasonable market behaviors such as manual interest payment and capital idling in accordance with the requirements of the financial management department, so as to make the balance sheet and income statement of the whole bank cleaner, healthier and more sustainable, and the quality and efficiency of serving the real economy are also higher. Zhang Jinliang said.
Zhang Yi focused on answering the question of how CCB can bring better value returns to shareholders. Zhang Yi said that in the second half of the year, CCB will adhere to the theme of high-quality development, do a good job in the "five overall planning", and improve the "five major qualities". Specifically, it is to focus on key tasks such as increasing revenue, reducing expenditure, and controlling risks, so as to maintain the market advantage of financial indicators.
In terms of increasing income, on the basis of improving the quality and efficiency of serving the real economy, we should highlight the requirements of high-goal guidance and high-quality development. First of all, it is necessary to coordinate and balance the structure of volume and price, and strive to stabilize net interest income as soon as possible. The second is to deepen comprehensive service capabilities and grasp the opportunities for intermediate business development. The third is to do a good job in asset portfolio allocation and increase the contribution of other non-interest income.
"Judging from the data of the previous months, the interest-bearing assets of CCB continued to maintain a rapid growth trend. There are still many points for asset growth in the next step, such as the acceleration of government bond issuance, large-scale equipment renewal, trade-in of consumer goods, and policy optimization of the real estate market, which will create important opportunities for credit growth. Zhang Yi said.
In the first quarter of this year, the net fee income of the banking industry fell overall, and the net fee income of the 15 national banks listed on the A-share market fell by 10.3% in total. According to CCB data, the revenue was 39.28 billion yuan, a decline better than the industry average, and the revenue of emerging kinetic energy businesses represented by consumer finance and wealth management accounted for more than 65%.
Zhang Yi said: "Although the current intermediate business is facing challenges such as fee reduction and commission reduction, in the long run, the related business will gradually shift from price to quality and service, which will help cultivate core competitiveness." At the same time, we will seize market opportunities such as cultivating new quality productivity, consumption recovery, and wealth management, enhance our ability to serve the public and financial intelligence, expand the breadth and depth of retail services, cultivate professional capabilities in asset management, and create more value for customers with comprehensive financial service capabilities. ”
In terms of cost savings, Zhang Yi said that CCB will strengthen overall cost management. In terms of risk control, this includes strengthening the Group's overall risk management.
"In the first quarter, asset quality and risk resilience remained good. The non-performing loan ratio decreased by 1BP from the beginning of the year to 1.36%, and the provision coverage ratio remained at a high level among peers. Asset quality and risk management capabilities are inseparable, and we have long adhered to a prudent and prudent management philosophy, and have a solid foundation for asset quality control. In the next step, we will continue to strictly and practically grasp comprehensive risk management, optimize the credit structure, do a good job in customer selection, and build a solid foundation for stable asset quality. At the same time, we should take the initiative to respond to risks in a forward-looking manner, identify early, warn, expose and deal with them early, and keep the bottom line of risks. As the external business environment continues to improve and internal control continues to strengthen, we are confident and capable of maintaining a coordinated, stable and sustainable asset quality. Zhang Yi said.
Completed the issuance of 50 billion TLAC in the third quarter
On April 29 this year, the extraordinary general meeting of shareholders of CCB deliberated and approved the proposal on the issuance of financial bonds, TLAC instruments and capital instruments, and the bank plans to issue non-capital debt instruments equivalent to 50 billion yuan. Sheng Liurong said that at present, CCB has formally submitted an application for the issuance quota to the regulatory authorities, and the regulatory authorities are in the process of accepting it, and after the approval is passed, the bank will select a suitable window period for issuance, and initially plans to complete the issuance of 50 billion TLAC non-capital debt instruments in the third quarter of this year to ensure that the first phase of TLAC in 2025 meets the standard.
In addition, CCB deliberated and approved the proposal to issue Tier 2 capital bonds equivalent to RMB200 billion for two years at the 2022 Annual General Meeting of Shareholders, and has completed RMB150 billion as of the first half of this year. Sheng Liurong said that the remaining 50 billion yuan of issuance quota is planned to be completed in the second half of the year. "According to the data at the end of March 2024, if the issuance plan of no more than RMB 200 billion equivalent capital instruments and the remaining RMB 50 billion of secondary bonds approved by the extraordinary general meeting of shareholders are fully implemented, CCB's capital adequacy ratio is expected to increase by 1.16 percentage points, ensuring that the capital adequacy ratio is at the leading level among peers." Sheng Liu Rong said.
At the meeting, some shareholders asked how CCB would maintain its capital adequacy ratio at a relatively reasonable level through capital management and the implementation of new capital regulations. Sheng Liurong first introduced that by the end of the first quarter of this year, CCB's capital adequacy ratio remained at the leading level in the industry, with the group's capital adequacy ratio at 19.34% and the core Tier 1 capital adequacy ratio at 14.11%, an increase of 1.39 and 0.96 percentage points respectively over the previous year.
Sheng Liurong said that in the next step, the bank will work hard from both the numerator and the denominator to ensure that the capital adequacy ratio remains relatively leading in the industry.
From the molecular end, the first aspect is to pursue high-quality development, strive to maintain a relatively stable level of profitability, and provide a foundation for capital support through profits. Second, through the intensive management of capital, in all aspects of financial assessment and resource allocation, by guiding institutions at all levels to ensure the coordination between business, finance and capital, so that capital can be in a state of intensive use. "Of course, it is not excluded that after the completion of the last round of capital plan issuance, we will launch a new Tier 2 capital bond issuance plan, and in the future, we will also replenish capital through the replenishment of external capital bonds and endogenous capital." Sheng Liu Rong said.
From the perspective of the denominator, the bank will continue to optimize the structure of major asset categories. First, the relationship between stock and increment should be properly handled, and total assets should maintain a relatively reasonable growth. Second, in terms of structural optimization, we will guide the business to develop in areas with low capital occupation and capital intensity. Specifically, we will invest more in retail assets with low capital occupation and high returns, focusing on the "five major articles" to improve the ability of comprehensive financial services. The third is to appropriately control the business with high capital occupation, including the interbank business and equity investment business, and effectively control the growth of risk-weighted assets. Fourth, we will continue to strive to ensure the high-quality implementation of the new capital regulations through dynamic management and continuous optimization in the process of implementing the new capital regulations.
Interim dividends will be implemented in 2025
CCB has maintained a stable dividend ratio in recent years, with a cumulative dividend of more than 1.1 trillion yuan since 2015, and the dividend rate has remained at 30% in recent years. At the results conference in April this year, it was revealed that according to the "Opinions on Strengthening the Supervision of Listed Companies" issued by the China Securities Regulatory Commission in the early stage, CCB is actively and orderly promoting interim dividends.
At the shareholders' meeting, Wang Bing further revealed the relevant progress. Wang Bing said that the bank's 2024 interim dividend is progressing in an orderly manner. "CCB's 2024 interim dividend conditions, proportion cap and other related arrangements have been deliberated and approved by the board of directors, and after the deliberation and approval of this general meeting of shareholders, a specific plan for the 2024 interim dividend will be formulated, and we will implement it after fulfilling the corporate governance procedures in accordance with relevant laws and regulations and the relevant provisions of the company's articles of association. According to the preliminary arrangement, it is planned to complete the 2024 interim dividend payment after New Year's Day and before the Spring Festival in 2025. Wang Bing said.
Regarding the normalization of medium-term dividends, Wang Bing responded that the Central Economic Work Conference proposed that there should be more policies that are conducive to stabilizing expectations and growth, and the regulatory authorities also have institutional arrangements. The interim dividend is not only an important measure for CCB to implement the relevant requirements, but also a concrete embodiment of giving back to investors and enhancing the confidence of the capital market. In the next step, CCB will reasonably determine the relevant arrangements for interim dividends in the coming years based on regulatory requirements and its own operating conditions.
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