In 2021, ICBC achieved an operating revenue of 860.9 billion yuan, an increase of 7.6% over the previous year; The net profit was 350.2 billion yuan, an increase of 10.2% over the previous year; The year-end non-performing rate was 1.42%, a year-on-year decrease of 16bp; The provision coverage rate rose to more than 200% for the first time in seven years.
Xinhua Finance and Economics Beijing, March 31 (reporter Han Jie Yu Rui) on March 30, ICBC announced that in 2021, the group achieved an operating revenue of 860.9 billion yuan, an increase of 7.6% over the previous year; The profit before provision was 627.5 billion yuan, an increase of 5.5% over the previous year; The net profit was 350.2 billion yuan, an increase of 10.2% over the previous year; The average return on total assets and weighted average return on net assets were higher than those of the previous year. At the end of 2021, the bank’s capital adequacy ratio was 18.02%; The non-performing loan ratio was 1.42%, down 0.16 percentage points from the end of the previous year; The provision coverage rate was also increased to 205.84% quarter by quarter. In 2021, the total expected dividend of ICBC’s common shares is 104.5 billion yuan, that is, the pre tax dividend of 2.933 yuan per 10 shares.
Under the impact of the epidemic, what are the business highlights behind the brilliant performance of ICBC? What are the sources of performance? What is the situation in terms of reducing fees and transferring profits to the real economy? What plans and measures does ICBC have for its overall operation in 2022? On the above questions, Liao Lin, President of industrial and Commercial Bank of China, answered the questions of Xinhua Finance reporters at the 2021 annual performance conference.
What are the highlights?
Highlight 1: the foundation of “strong” will be further consolidated. At the end of 2021, the bank’s capital adequacy ratio exceeded 18%, ranking among the world’s largest banks; The non-performing rate was 1.42%, a year-on-year decrease of 16bp; The provision coverage rate rose to more than 200% for the first time in seven years, and the risk offsetting capacity continued to increase.
Highlight 2: the posture of “excellent” is further improved. In 2021, the bank’s operating efficiency continued to improve, and its return on assets (ROA) and return on capital (ROE) were higher than those of the previous year. The net interest rate of return (NIM) is 2.11%, which is better in the same industry.
Highlight 3: the advantage of “big” is further consolidated. The operating revenue of the whole group was 860 billion yuan, an increase of 7.6%; The net profit exceeded 350 billion yuan, an increase of 10.2%. The leading advantage of the industry continues to be consolidated. In 2021, the group’s assets, capital, deposits and loans will remain the first in the world, and the market value and total dividends will be the first in the domestic industry.
Highlight 4: the “specialized” characteristics of ICBC fully emerged last year. For example, there are more than 700 million personal financial customers, nearly 8 trillion personal loans, 12.5 trillion personal deposits and nearly 17 trillion AUM, keeping the lead. In terms of public sector, the scale of credit in many fields continues to maintain a leading position, including manufacturing financial loans exceeding 2 trillion yuan and green finance loans reaching 2.48 trillion yuan. Inclusive loans exceeded 1 trillion yuan, with a growth rate of more than 50%. Loans to high-tech fields and strategic emerging industries supported by the state have exceeded 1 trillion yuan.
Liao Lin told reporters that the business performance in 2021 reflects the overall balance of value creation, market position, risk control and capital constraints, shows the high-quality development quality of ICBC in the “six unification” of quality, structure, scale, speed, efficiency and safety, and highlights the characteristics of ICBC with steady development and strong toughness.
What are the main sources of performance in 2021?
Source 1: improve the performance of serving the real economy, effectively promote business development, and achieve qualitative improvement and quantitative growth. Liao Lin told reporters that serving the real economy is the bounden duty of Finance and the fundamental measure to prevent risks. “In the face of the complex and severe external situation, we have strengthened our feelings and responsibilities of serving the country through finance, fully implemented the ‘three tasks’ of financial work, and promoted our own development while helping the recovery and development of the economy, so as to achieve stable improvement in quality and reasonable growth in volume. For example, last year, the bank’s RMB loans increased by 2.1 trillion yuan, an increase of 243.3 billion yuan year-on-year, driving interest growth to 6.4%.”
Source 2: the new plan has made a start, effectively promoting the effectiveness of business transformation and accelerating the release. It is understood that ICBC benchmarked the national “14th five year plan”, launched the implementation of the new plan of ICBC, promoted the solid implementation of the four layout of “developing strengths, making up weaknesses, consolidating capital and strengthening foundation”, achieved new breakthroughs in strategic priorities such as “the first personal financial bank”, increased deposits and income, improved quality and achieved new results. For example, the non interest income dominated by handling fees and commission income reached 170.2 billion yuan, an increase of 11.0%.
Third, the operation and management ability is enhanced, and the cost control is more refined. Liao Lin said, “last year, there were more adverse factors affecting profit growth. We insisted on living a tight life, highlighted connotative development, and did a good job in basic work. In particular, by accelerating the digital transformation, we further saved expenses and increased efficiency, and the cost income ratio continued to be at a better level. Especially in strengthening the operation and management of risk assets, ICBC recovered more than 10 billion yuan of recorded assets last year, the most in recent years.”
For the overall business plans and measures of ICBC in 2022, Liao Lin told reporters that the main work characteristics of this year will be carried out around the three key words of “stability, progress and reform”.
Specifically, “stability” means to adhere to the word “stability” and seek progress in stability, so as to help achieve the goal of macroeconomic stability. “Advance” means continuously improving the quality and efficiency of serving the real economy, helping high-quality development and achieving more “advance” results. “Reform” refers to strengthening the reform and tackling key problems and doing a good job in the answer sheet of “reform” driven by the rectification of problems fed back by the central inspection team.
As for why he is full of confidence in this year’s operating performance, Liao Lin said that this confidence comes from three aspects: first, China’s economy is stable and promising, which is the biggest foundation for the excellent performance growth of ICBC. Liao Lin said that the external environment has become more complex this year, but according to the data of the previous two months, China’s economy has shown real warmth. Steady economic growth will lay a solid foundation for steady financial development.
Second, the promotion of the new plan is effective, which is the brightest background of ICBC’s strong performance potential. Liao Lin said that ICBC will make every effort to promote the four layout of “developing strengths, filling weaknesses, consolidating capital and strengthening foundation”, implement the strategic priorities such as “the first personal financial bank”, solidly carry out basic projects such as GBC, and promote the whole bank to further strengthen and improve on the basis of expansion, so as to take the road of China’s special financial development.
Third, the deepening of reform and innovation is the deepest implication of ICBC’s great performance potential. “ICBC has come to this day by relying on reform and innovation, and will also rely on reform and innovation to move towards the future. This year, we will focus on three breakthroughs: first, deepen the construction of customer service marketing system and build a good customer ecology; second, improve the comprehensive risk management system and improve the forward-looking effectiveness of risk control; third, deepen the digital transformation, strive to create new models and business forms, and promote the formation of more new growth points and new driving forces 。” Liao Lin said.
With regard to the measures taken by ICBC in 2021 to implement the policy of reducing fees and transferring profits to the real economy and contribute to the stable recovery of the economy and the steady development of market players, Liao Lin said that they were reflected in the following four aspects: first, reducing interest rates. In 2021, the average interest rate of new corporate loans and the interest rate of new Pratt & Whitney loans issued by ICBC further decreased by 15bp and 18bp respectively on the basis of the decline of the previous year.
Second, reduce costs. At present, the number of free service items has increased from 109 to 149. It also took the initiative to exempt and reduce service charges for small and micro enterprises with operating difficulties.
Third, extend the principal and interest. Continue to extend the principal and interest of loans for qualified customers to help reduce the financial burden.
Liao Lin told reporters that customers are the source of bank value creation. We should not only pay attention to their immediate income, but also pay attention to their long-term comprehensive value. “For us, reducing fees and transferring profits is not only the internal requirement of fulfilling the administrative and social responsibilities of the state-owned economy, but also the inevitable choice to maintain business sustainability. In the future, we will continue to implement the requirements of reducing fees and transferring profits, work together with customers to tide over difficulties, and help the financing cost of the real economy fall steadily.”
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