A direct look at Industrial Bank’s performance briefing: We will unswervingly shift to high-quality development and are confident of outperforming the market!

A direct look at Industrial Bank’s performance briefing: We will unswervingly shift to high-quality development and are confident of outperforming the market!

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  “This year is the 36th anniversary of the founding of Industrial Bank. Establishing at 30 is a thing of the past, and we still have a long way to go to remain at 40.” Lu Jiajin, Chairman of Industrial Bank, said in a speech2023It was stated at the annual performance briefing that,The upcomingWe will firmly follow the path of financial development with Chinese characteristics to ensure that we can continue to outperform the market and further consolidate our position among joint-stock commercial banks.

  Planning work for this year,There are many difficulties in following the old path, and we must unswervingly shift from high-speed growth to high-quality development.Lu Jiajin said that we must adhere to quality first and efficiency first, focusing on optimizing business structure, stabilizing interest margins, controlling capital consumption, and achieving balanced development of scale, quality, and efficiency.

  He emphasized that Industrial Bank will also focus on three aspects of work this year:One isWe will effectively fight against risks and focus on the management of credit risks, interest rate risks, and new types of risks.Prevent and resolve;two isAccelerate the release of technological productivity and deepen“Enterprise-level, standardized”, accelerating the construction of scene ecology and strengthening digital operations;The third isStrive to build a high-quality team,“From the past, I was good at big projects such as real estate and infrastructure to doing detailed, professional and technical work.”

  “Looking forward to 2024, there are still many complexities and uncertainties in economic development, but for Industrial Bank, several of the many uncertainties are relatively certain.” Chen Xinjian, President of Industrial Bank, commented on the outperformance. The market is full of confidence. He believes that the narrowing of net interest margin will further decline this year; risks in key areas such as credit cards and government platforms are generally controllable; the dividends of digital transformation will be further released, and the empowerment of business development will be more obvious; management With a focused and pragmatic approach, the bank has clear strategies and effective execution.Promote good business development,The confidence to outperform the market also comes from the continued improvement ofFive aspects of ability“:strategic execution capabilities,customer service capabilities,Investment and trading capabilities,Comprehensive risk control capabilitiesmanagement promotion ability.

  Industrial BankThe 2023 annual report shows that last year the bank’s total assets exceeded 10 trillion yuan, and its loans and deposits both exceeded 5 trillion yuan; it achieved net interest income of 146.503 billion yuan, a year-on-year increase of 0.85%; the non-performing loan rate was 1.07%, declining for three consecutive years;Ming ShengThe ESG rating was upgraded from A to AA, making it the only bank in China’s domestic banking industry to receive the highest rating for five consecutive years.

  Promote balance sheet restructuring

  “The operating performance is stable and good, in line with expectations.”

  “It is mainly due to the one-time impact of the income from old financial products. If this factor is excluded, on a comparable basis, revenue will have a positive growth of 0.94% year-on-year, and net profit will also maintain a good level.” Regarding the decline in revenue and net profit that the market is concerned about , Industrial Bank President Chen Xinjian responded directly at the performance briefing meeting.

  It is particularly worth mentioning that last yearAgainst the backdrop of LPR cuts and mortgage interest rate adjustments affecting interest income, Industrial Bank achieved net interest income of 146.503 billion yuan, a year-on-year increase of 0.85%.

  In recent years, Industrial Bank has promoted a new round of balance sheet restructuring, making its business transformation and development more balanced.Asset side, implementation“Consolidate the roots and revive the new”the asset layout is more consistent with the transformation direction of the real economy, science and technology innovation, inclusiveness, energy, automobiles, parksLoans in the “five major new tracks” achieved double-digit growth compared with the beginning of the year, and relatively weak operating loans and consumer loans also increased by 16.22% and 20.57% respectively compared with the beginning of the year.Liability side, realization“Reducing costs and increasing efficiency.”The interest rate of RMB deposits, interbank deposits and bonds issued throughout the year decreased year-on-year.11 BP, 1 BP and 10 BP.

  “Through the growth of liabilities and optimization of costs, we can effectively support the release of credit assets and offset the impact of narrowing interest margins. Our bank’s net interest margin fell by 17 BP year-on-year throughout the year, and the decline was relatively well controlled.” Chen Xinjian said.

  Thanks to steady development,Industrial Bank will further improve in 2023Cash dividends as a proportion of net profit attributable to ordinary shareholders of the parent companyto29.64%, close to 30%. Since its listing in 2007, the bank has distributed a total of 193.67 billion yuan in dividends, much higher than the 83.535 billion yuan in common stock-related financing, giving investors generous returns.

  “We are confident that we can maintain the stability of our operations this year and provide investors with more robust returns. We hope to improve every year, achieve ‘symbiosis and win-win’ between social value, shareholder value and the bank’s own value, and create a ‘value bank’ with Industrial characteristics. .” Chen Xinjian said.

  Looking forward to the trend of net interest margin this year,byAffected by the continued downward adjustment of LPR, the net interest margin will still be in a downward channel in 2024. It is not ruled out that LPR will still have further downside in the future.Lin Shu, general manager of the Planning and Finance Department of Industrial Bank, said that the bank will continue to promote balance sheet restructuring, alleviate downward pressure on interest margins, and strive to continue to outperform the market in net interest income performance.

  Forged long plates, solid base plates, and short-forming plates

  “Enhancing comprehensive strength through economic cycles”

  The Central Financial Work Conference pointed out that it is necessary to do a good jobFive major articles: technology finance, green finance, inclusive finance, pension finance, and digital finance.The “Five Big Articles” are highly consistent with Industrial Bank’s strategic development priorities of “Three Business Cards”, “Five New Tracks” and “Digital Transformation”.

  As Industrial Bank’s strength and advantage, last year“Three Business Cards” achieved new breakthroughs.

  Green banking,The bankThe balance of green financing in 2023 increased by 16.14% from the beginning of the year to 1.89 trillion yuan, of which green loans approved by the People’s Bank of China reached 809 billion yuan, an increase of 171.9 billion yuan from the beginning of the year, accounting for 36% of new loans. The interest rate of green loans is basically the same as that of corporate loans, the non-performing loan rate is only 0.41%, and the income and risk performance are stable.

  Wealth bankingthe group’s retail sales last yearAUM (including third-party custody market value) reached 4.8 trillion yuan, Xingyin Financial ManagementManagement scale increased compared with the beginning of the year8.18% to 2.26 trillion yuan,Ranked No. 1 in the market2.

  “We will regard 2024 as the ‘Year of Wealth Bank Improvement’, and make the improvement of Wealth Bank the first of our three major retail business strategies in the next few years.” Zhang?, Vice President of Industrial Bank, said that in 2024, the bank will strive to retail wealth intermediary business Revenue exceeded 6 billion yuan, of which the growth rate of agency revenue remained above 10%.

  investment bankinglast year the bank’s non-financial bond underwriting scale exceeded730 billion yuan, ranking first in the market; its overseas bond underwriting scale ranks first among Chinese joint-stock commercial banks; its REIT-like underwriting scale ranks second in the market.at the same timeOn the scale of mergers and acquisitionsalsoHas gradually established itself as the first echelon in the banking industry,closetwo yearsShouldImplemented M&A businessallovertake150 billion yuan,inIt will contribute revenue of 1.4 billion yuan in 2023, a year-on-year increase of 122%.

  M&A businesshas becomeI canThe new driving force for the growth of investment banking revenue has also led to new customers, deposits, salary payment, credit cards, pension accounts, personal consumption loans, etc. The overall benefits are very good.Zeng Xiaoyang, Vice President of Industrial Bank said.

  The “three business cards” continue to be polished, providing an important starting point for Industrial Bank to write the “five major articles”. And as early as two years ago, Industrial Bank forward-lookingly proposed the business strategy of “stabilizing the basic market and laying out new tracks”, and launched the “Five New Tracks”, which is highly consistent with the connotation and goal requirements of the “Five Major Articles” , embodying the ability to grasp forward-looking strategies. Not only did it act early on the “five major articles”, Industrial Bank also has the advantages of a good system, flexible mechanisms and many talents.

  In the past two years, Industrial Bank’s loan balances in the fields of science and innovation finance, green finance, inclusive finance, automobile finance, and park finance have increased cumulatively.106.5%, 78.5%, 67.7%, 64.9%, 55.9%, far exceeding the growth level of total assets. “Practice has proven that by writing the ‘Five Big Articles’ well, you not only achieve the transformation and development of your own business, but also achieve symbiosis, co-prosperity and coordinated development with the service real economy.” Lu Jiajin said.

  Lu JiajinAt the performance briefing meeting, it was emphasized that it is necessary to strengthen the strengths of the interbank and financial market businesses and the bottom line of the solid enterprise finance and investment banking businesses. The focus is to make up for the shortcomings of the retail business and gradually realize the three major lines.“Three pillars” to enhance the comprehensive strength through the economic cycle.

  Interbank and financial markets have always been the distinctive businesses of Industrial Bank.“Last year, we faced the unpredictable market, stayed true to our principles, innovated, and worked tirelessly. It should be said that we fulfilled our mission.” Zhang Ting, Vice President of Industrial Bank, said that in 2023, the bank’s inter-industry customer cooperation coverage will exceed 97%, and its income structure Significantly optimized, the proportion of “basic” revenue that is not affected by market valuation fluctuations has increased from 50% in the previous year to more than 80%, and liability business revenue has increased by 20% year-on-year, reaching a new high in recent years.

  Risks in key areas are generally controllable

  “New NPLs and risk costs will decline to a certain extent in 2024.”

  “Our bank has a lower risk level and more adequate impairment provisions, laying a solid foundation for stable and long-term development in the future.” Lu Jiajin said at the performance briefing meeting.

  Specifically, as ofAt the end of 2023, the bank’s non-performing loan balance was basically the same as at the beginning of the year, and the non-performing ratio was 1.07%, a decrease of 0.02% from the beginning of the year, which is about two-thirds of the average level of the banking industry; the provision coverage rate was 245.21%, an increase of 8.77 percentage points from the beginning of the year. 1.2 times the banking industry average;OverdueThe ratios of loans over 90 days, loans overdue for more than 60 days and non-performing loans were 68.30% and 77.33% respectively, which were also at the best level in the past three years.

  Risks in the three key areas of real estate, local government financing, and credit cards that have attracted much attention are generally controllable and risks have converged. According to Chen Xinjian, in terms of real estate,In 2023, the bank’s new non-performing loans for corporate real estate fell by 53.98% year-on-year; in terms of local government financing, new non-performing loans of local government financing platforms fell by 55.22% year-on-year; in terms of credit cards, some forward-looking indicators improved, and the collection rate dropped from the beginning of the year. 0.36 percentage points, and the overdue rate dropped by 0.59 percentage points from the beginning of the year.

  In recent years, the central government has introduced a package of debt-reduction policies intensively, insisting on reducing the existing debt and curbing the increase, and consolidating the responsibilities of all parties. Market confidence has improved, and the financial debt risks of financing platforms have been reduced.“Our bank resolutely implements the requirements of the centralized debt policy, gives full play to its comprehensive financial advantages, promotes business transformation and development, and supports high-quality regional economic development in compliance with regulations, and has achieved good results.Lai Furong, general manager of the Risk Management Department of Industrial Bank, said.

  EnterIn 2024, with the implementation of the country’s monetary, fiscal and industrial policies to resolve financial risks, the problems affecting the aggravation of risks in my country’s financial industry will gradually be resolved. “Our bank will seize all favorable opportunities, take effective measures to resolve existing risks, further consolidate the foundation for high-quality development, adjust the asset structure during high-quality development, and further enhance the ability to prevent risks.” Lu Jiajin said.

  Based on the current situation, he said it is expected that Industrial BankIn 2024, new NPLs and risk costs will decline to a certain extent compared with last year. Key indicators such as asset quality and asset impairment are conditionally able to continue to operate smoothly. “This year’s financial situation is better than last year.”

  “Seeking benefits from digitalization”

  Efforts to connect digitalization to productivity“The last mile”

  “In the early stage, we did a lot of basic, pilot and strategic work around digital transformation, and now we have reached a new stage of seeking benefits from digitalization.” Lu Jiajin emphasized.

  In the past three years, Industrial Bank hasThe “enterprise-level, standardized” methodology has promoted transformation at a life-or-death speed. Investment in science and technology has increased by more than 70%, scientific and technological talents have more than doubled, and invention patent applications have increased by 50 times. At the end of 2023, the group’s technology investment was 8.398 billion yuan, accounting for 3.98% of revenue; there were 7,828 scientific and technological talents, accounting for 13.91%.

  “In the past, technology was our bank’s shortcoming. After two or three years, the ‘four beams and eight pillars’ of digital transformation have been basically established.” Chen Xinjian also said.

  At present, Industrial Bank has initially built a comprehensiveThe digital industrial system of “1 (mobile banking) + 5 (IB Benefits, Industrial Butler, Industrial Life, Qianda Zhangguo, YinYin platform) + N (various scenario ecology)”. According to reports, the bank’s mobile banking MAU has increased by 44.11% in the past two years, and more than 1,000 new projects have been added to the scene ecological construction, covering an average daily settlement deposit of 319.041 billion yuan, an increase of 14.61% from the beginning of the year.

  In recent years, digital technology has advanced by leaps and bounds, from big data to large models, from Vincentian texts to Vincentian pictures and Vincentian videos.Industrial Bank is also actively grabbing generativeOpportunities for AI development: In February last year, we started cooperative research with leading domestic manufacturers. In June, we released ChatCIB, a large-scale privatized model in the industry worth tens of billions, forming the first batch of large-scale AI model applications.

  “In the next stage, we will stick to a blueprint and draw it to the end, focus on ‘producing results’, and strive to achieve ‘three breakthroughs and one persistence’.” Sun Xiongpeng, vice president of Industrial Bank, said when talking about the digital industry construction plan.

  “Three breakthroughs”,Right nowAI breakthroughfocusing on the three aspects of application, foundation and innovation. In terms of application, focus on intelligent marketing, investment research and investment consulting, intelligent risk control, intelligent office and code generation to accelerate the formation of productivity;A breakthrough in digital operationsaccelerate the realization of data-driven decision-making, deepen the integration of online and offline operations, and create a synergy between branch development and digital development;A breakthrough in scene ecologyembedding more digital financial services into customer production and operation scenarios.“One perseverance”It means adhering to the bottom line of safety, continuing to prevent and control technological risks, ensuring business continuity, and coordinating development and safety.

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