China Construction Bank Corporation

2008 Interim Results - Major Financial Indicators

 (As of 30 June 2008) 

·       Operating income rose by 36.04% y-o-y to RMB135.736 billion

(1H2007: RMB99.773 billion)  

·       Profit before tax increased by 49.69% y-o-y to RMB75.655 billion

(1H2007: RMB50.542 billion)  

·       Net profit increased by 71.34% y-o-y to RMB58.692 billion

(1H2007: RMB34.255 billion)  

·       Earnings per share (basic and diluted) increased by 66.67% y-o-y to RMB0.25

(1H2007: RMB0.15) 

·       Annualised return on average assets1 rose by 0.54 percentage points y-o-y to 1.72%

(1H2007: 1.18%)  

·       Annualised return on average equity2 advanced by 6.56 percentage points y-o-y to 26.36%

(1H2007: 19.80%) 

·       Net interest spread rose by 0.15 percentage points y-o-y to 3.16%

(1H2007: 3.01%) 

·       Net interest margin rose by 0.18 percentage points y-o-y to 3.29%

(1H2007: 3.11%) 

·       Net fee and commission income to operating income increased by 2.17 percentage points y-o-y to 14.86%

(1H2007: 12.69%)

 ·       Cost-to-income ratio declined by 3.33 percentage points y-o-y to 34.03%

(1H2007: 37.36%) 

·       Total assets increased by 6.96% to RMB7,057.706 billion compared to the end of last financial year

(As at 31 December 2007: RMB6,598.177 billion)  

·       Core capital adequacy ratio3 decreased by 0.29 percentage points to 10.08% compared to the end of last financial year

(As at 31 December 2007: 10.37%)  

·       Capital adequacy ratio3 decreased by 0.52 percentage points to 12.06% compared to the end of last financial year

(As at 31 December 2007: 12.58%)  

·       Allowances to non-performing loans ratio rose by 12.82 percentage points to 117.23% compared to the end of last financial year

(As at 31 December 2007: 104.41%)  

·       Non-performing loan ratio decreased by 0.39 percentage points to 2.21% compared to the end of last financial year

(As at 31 December 2007: 2.60%)  

Notes:

1 Calculated by dividing net profit by the average of total assets as at the beginning and end of the period and then multiplying two.

2 Calculated by dividing net profit attributable to shareholders of the Bank by the monthly average of total equity attributable to shareholders of the Bank for the period and then multiplying two.

3 Calculated in accordance with the guidelines issued by the China Banking Regulatory Commission (“CBRC”). 
 

China Construction Bank Corporation

2008 Interim Result Announcement 

Sustainable Growth in Profitability Assets Exceeded RMB7 Trillion 

22 August 2008 - China Construction Bank Corporation (”CCB” or “the Bank”) today announced its 2008 interim results. In the first half of 2008, facing complex international and domestic economic situations, CCB had been comprehensively adopting a scientific approach towards development, stringently executing national macro-economic adjustment policies, entrenching reforms in operational and management systems, continuously pushing forward with strategic transformation in business development and concentrating on lifting customer service levels. In this period, remarkable improvements in business structure were made; strong income growth momentum in intermediary business was maintained; risk mitigation capability was further strengthened; and sound operating results were achieved. 

As at 30 June, CCB‘s total assets exceeded RMB7 trillion, reaching RMB7.057706 trillion (all figures below are calculated in accordance with the International Accounting Standards and are denominated in RMB unless otherwise specified), which was an increase of 6.96% over the end of last financial year. Profit before tax was 75.655 billion, a year-on-year increase of 25.113 billion or 49.69%. Benefiting from business development and an adjustment in the rate of enterprise income tax for domestic enterprises, a net profit of 58.692 billion was realised, which was a year-on-year increase of 24.437 billion or 71.34%. The realised operating income was 135.736 billion, representing a 36.04% year-on-year increase. The net interest income reached 111.080 billion and net fee and commission income reached 20.168 billion, up by 24.51% and 59.30% from the same period of the previous year respectively. CCB continued leading the mainland banking industry in terms of overall profitability: the Bank achieved an annualised return on average assets of 1.72%, an annualised return on average equity of 26.36% and a net interest margin of 3.29%, representing increases of 0.54, 6.56 and 0.18 percentage points over the same period of the previous year respectively. Its capital adequacy ratio was 12.06% while its core capital adequacy ratio was 10.08%. CCB’s asset quality had improved steadily: the amount and ratio of its non-performing loans continued to decrease; the ratio of non-performing loans fell to 2.21%, which was a drop of 0.39 percentage points from the end of last year. There was also further improvement in CCB’s risk mitigation capability: the ratio of allowances to non-performing loans was 117.23%, an increase of 12.82 percentage points over the end of the previous year. 

Mr. Guo Shuqing, Chairman of CCB, said that CCB achieved good operating results for the first half of 2008 because it had benefited from China’s overall economic and financial environment and from the Bank’s own internal reform and innovation, and had availed itself of the wisdom and efforts of all staff. While striving for business development, CCB had seriously concerned itself with the livelihood of the people of China. Following the snowstorm disaster early this year and the severe earthquake in Wenchuan, Sichuan, the whole Bank focused its attention on the disaster areas and joined efforts in providing quick and effective financial services and credit support for disaster relief and reconstruction work, thereby carrying out its noble mission: “assume full responsibilities as a corporate citizen”. 

Stronger Efforts in Business Innovation and Significant Enhancement of Overall Competitiveness 

Since the beginning of this year, in response to market and customer demands, CCB has been putting additional effort in the innovation of financial products and services, resulting in significant enhancement in its overall competitiveness and profitability.

While consolidating its traditional business areas, CCB saw a rapid development in its newly developed businesses such as investment banking, which realised an income of 3.203 billion, representing a year-on-year increase of 195.71%. In particular, by launching new types of financial advisory business such as IPO and re-financing; mergers & acquisitions and restructuring; equity investment; and project financing, it had been acquiring incessantly customers in financial advisory services from the ranks of customers graded AA or above, multinational corporations, foreign banks and large to medium-sized enterprises. Financial advisory business fees for the period was 2.377 billion, a substantial increase of 165.10%.