By the end of 2023, the green credit of the six major state-owned banks will be nearly 18 trillion yuan
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Recently, Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications and Postal Savings Bank of China have successively disclosed their 2023 annual reports and social responsibility (ESG) reports. The report shows that large state-owned banks continue to play the role of “lead goose”, continue to deepen their exploration in the field of green finance, and green credit maintains rapid growth. As of the end of 2023, the scale of green credit of the six major banks reached 17.90 trillion yuan. At the same time, the six major banks continue to enrich the green finance “toolbox” and build a diversified green financial service system.
Green credit maintains rapid growth
In 2023, large state-owned banks will deeply explore and cultivate the green credit market and comprehensively promote the development of green investment and financing businesses such as green loans, green bonds, and green financial management.
From the perspective of green credit scale, the reporter learned from the annual report data that as of the end of 2023, the green credit scale of the six major banks reached 17.90 trillion yuan, accounting for half of domestic green loans. Data released by the People’s Bank of China at the beginning of this year showed that as of the end of 2023, the balance of green loans in domestic and foreign currencies in my country was 30.08 trillion yuan, a year-on-year increase of 36.5%, which was 26.4 percentage points higher than the growth rate of various loans.
Specifically, ICBC’s green loan scale and increase are still ahead of its peers. As of the end of 2023, ICBC’s total domestic green loans reached a record high, with green loans approved by the State Administration of Financial Supervision of nearly 5.4 trillion yuan, an increase of nearly 1.4 trillion yuan from the end of the previous year.
The green credit balance of Agricultural Bank of China exceeded 4 trillion yuan. As of the end of 2023, the bank’s green credit business balance reached 4,048.7 billion yuan, a year-on-year growth of 50.1%, a significant increase from the 1,977.8 billion yuan at the end of 2021 and the 2,697.5 billion yuan at the end of 2022.
The green credit balances of Bank of China and China Construction Bank also exceeded 3 trillion yuan, which were 3.11 trillion yuan and 3.88 trillion yuan respectively, an increase of 56.34% and 41.19% respectively from the end of the previous year. Bank of Communications disclosed that the bank’s green loan balance under the People’s Bank of China was 822.042 billion yuan, a year-on-year increase of 186.610 billion yuan, an increase of 29.37%; the Postal Savings Bank of China’s green loan balance was 637.878 billion yuan, an increase of 28.46% from the end of the previous year.
In addition to credit, the six major banks also provide financial support for green industries through the issuance and underwriting of green bonds.
Judging from the issuance of green bonds, since 2021, commercial banks represented by large state-owned banks have gradually increased the scale of green bond issuance and promoted the expansion of the total amount of green bonds. In 2023, ICBC issued US$4.23 billion in green bonds overseas. By the end of the year, it had issued a total of 9 overseas green bonds with a total amount of US$19.9 billion; it had completed three phases of domestic green financial bond issuance with a total amount of 60 billion yuan. Bank of China issued overseas green financial bonds worth US$2.4 billion and domestic green financial bonds worth RMB30 billion. Bank of Communications will issue 30 billion yuan of domestic green financial bonds in 2023. In August of that year, the Hong Kong Branch successfully issued Bank of Communications’ first overseas green bond under the green bond framework, with a scale of US$500 million.
Judging from the green bond underwriting situation, in 2023, the Bank of China’s green bond underwriting volume will remain the market leader, underwriting domestic and overseas green bond issuance scale of 555.4 billion yuan, of which the underwriting domestic green bond issuance scale is 341.658 billion yuan, ranking first in the inter-bank market , underwriting overseas green bond issuance scale of US$29.76 billion. ICBC completed the underwriting of 95 ESG bonds of various types throughout the year, including green bonds, sustainable development-linked bonds, social responsibility bonds, etc., raising funds of 450.090 billion yuan, and the main underwriting scale was 112.875 billion yuan. China Construction Bank will participate in underwriting 76 issues of domestic and overseas green bonds in 2023, with an issuance scale equivalent to RMB 219.978 billion.
In addition, major state-owned banks are actively investing in green bonds. ICBC’s new investment in RMB green bonds in 2023 was 90.4 billion yuan, and the balance of green bonds at the end of the year was 273.2 billion yuan, a year-on-year increase of 33.5%; the new investment in foreign currency green bonds was US$429 million, and the balance at the end of the year was US$1.27 billion, a year-on-year increase of 36.27%. Agricultural Bank of China continues to increase its investment in green bonds. As of the end of 2023, the bank’s self-operated green bond investment scale was 144.34 billion yuan, an increase of 18.7% from the end of the previous year. Bank of China’s green bond investment scale as of the end of 2023 also exceeds 100 billion yuan.
Promote green financial product innovation
The ESG reports recently disclosed by various banks show that the six major state-owned banks continue to strengthen product and business model innovation in the field of green finance and continue to improve the quality and efficiency of green financial services.
In 2023, ICBC innovatively issued the bank’s first global multi-currency “carbon neutral” themed overseas green bond and the first domestic commercial bank carbon neutral green financial bond. It also innovatively launched ESG themed financial products and issued many ecological bonds. Green fund products in the fields of environment, ESG, carbon neutrality, etc.
ICBC also released more than a dozen green innovation cases in its ESG report. For example, ICBC Guangdong Branch provided a sustainable-linked loan of RMB 61 million to a papermaking company in Jiangmen. This loan was the first sustainable-linked loan in the papermaking industry in Jiangmen. , the loan interest rate is linked to the company’s energy conservation and emission reduction results. If the company’s sulfur dioxide and smoke dust, chemical oxygen demand and ammonia nitrogen emissions in the sewage are lower than the national emission standards and reach the emission value agreed in the contract, the loan can be enjoyed during the loan period. Preferential interest rates help encourage companies to reduce smoke and sewage emissions, and promote companies to achieve green and sustainable development.
Bank of China has anchored on the goal of being the “bank of choice for green financial services”, upgraded and improved the “BOC Green+” product and service system, and improved customers’ ESG risk management levels. In terms of “green + credit”, in 2023, Bank of China Shanghai Branch successfully organized a syndicated loan of RMB 1.5 billion linked to sustainable development for COSCO Shipping Energy Shipping Co., Ltd. This is the first syndicated loan linked to sustainable development in the Chinese shipping industry. of syndicated loans. In terms of “green + bonds”, the bank underwrote the country’s first non-financial corporate debt financing instrument linked to local carbon market transactions; supported new energy vehicle companies in issuing green asset securitization products, and launched the country’s first green bond in the new energy commercial vehicle field , support enterprises in manufacturing new energy commercial vehicles and promote energy conservation and emission reduction. In terms of “green + consumption”, Bank of China innovates green financial products from the consumer side, guides and encourages consumers to increase low-carbon behaviors, choose green products, and promotes the transformation of personal consumption into green and low-carbon.
In addition, the Agricultural Bank of China has innovatively launched regional special products such as green inclusive loans, marine pasture loans, and harmonious rural loans, and promoted the application of rural residential environment loans, green water and green mountain loans, ecological mutual wealth loans, and forest (bamboo) forest carbon sink loans, etc. product. The Postal Savings Bank of China has established a total of 28 green financial institutions such as carbon neutral branches, green branches and green finance departments, and continues to improve the quality and efficiency of green financial services for low-carbon transformation; it has issued the country’s first just transformation loan, and landed the country’s first “carbon emission reduction loan”. Support tools + sustainable development linkage + digital renminbi” loan scenario business to create a new model of green financial services.
Continue to strengthen green finance strategic guidance
In recent years, large state-owned banks have continued to strengthen their strategic leadership in green finance. For example, the strategic goal proposed by the Industrial and Commercial Bank of China in its green finance strategic plan is to “become a green bank with a good international reputation”, and it clearly states that it will build a “leading bank that practices green development” and will “strengthen the construction of green finance and ESG systems.” Promote implementation as concrete measures.
The Agricultural Bank of China also continues to track and evaluate the work measures in the bank’s “Green Finance Development Plan (2021-2025)”, supervise the implementation of plan implementation responsibilities, and accelerate the implementation of green finance strategies.
“The Central Financial Work Conference proposed that we must do a good job in the ‘five major articles’, and green finance is an important one.” Zhang Xuguang, deputy president of the Agricultural Bank of China, recently said at the 2023 annual results conference that the Agricultural Bank of China will focus on business development and its own We will build two main lines, continue to focus on energy revolution, industrial upgrading, ecological protection and other fields, and increase green capital investment. Give better play to the role of the Agricultural Bank of China, highlight the support for green development of agriculture and rural areas, and empower rural revitalization through the power of green finance. At the same time, the concept of green development is integrated into all areas and the entire process of operation and management, promoting green offices, building green outlets, implementing green procurement, and advocating green travel.
Lin Jingzhen, deputy governor of the Bank of China, also said at the bank’s performance conference that the Bank of China will further support industrial green development and low-carbon transformation, focusing on environmental protection and energy conservation, green and low-carbon cutting-edge technology research and development, waste recycling, large-scale wind power and photovoltaic bases Optimize financial services in construction and other fields and provide green financial services.
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