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Bank of Qingdao (3866.HK) Announces Interim Results for the Six Months Ended June 30
Net Profit Grew by 17.49% year-on-year to RMB1.262 Billion
HONG KONG, Aug 23, 2016 - (ACN Newswire) - Bank of Qingdao Co., Ltd. ("Bank of Qingdao", stock code: 3866), the largest City Commercial Bank in Shandong Province, China(1), announced its interim results for the six months ended June 30, 2016 (the "Reporting Period").
In the first half of 2016, China's economic growth remained stable due to favorable factors including the policies meeting people's basic needs, the warming up of the property market, and the streamlining of administration and the delegation of authority. Despite the latest progress achieved in the structural reform on the supply side, China's economy still faced relatively large downside pressure due to the declining private investments and the painstaking revival of Northeast China and other regions. Addressing the complex and challenging macroeconomic situation, Bank of Qingdao continued to implement "Interface Bank" strategy and transformation towards investment banking businesses, actively developed financial market businesses, in order to maintain a steady development of overall operation. As of June 30, 2016, total assets of the Bank amounted to RMB207.066 billion, representing an increase of RMB19.831 billion or 10.59%; total deposits amounted to RMB126.300 billion, representing an increase of RMB10.978 billion or 9.52%; total loans amounted to RMB80.946 billion, representing an increase of RMB8.250 billion or 11.35%, as compared with that at the end of the previous year.
During the Reporting Period, Bank of Qingdao further enhanced its personal credit asset structure and sturdily developed consumption finance with a focus on personal housing loans, continued to enhance its corporate loan structure, proactively supported the development of livelihood finance, supply chain finance, local infrastructure construction and environmental protection industries, and strengthened its risk management in key areas on an on-going basis. The Bank carried out numerous compliance tasks on internal control and prevention, including a multi-pronged approach to recover, resolve and dispose of non-performing loans to maintain the overall amount of such loans at a reasonable level of 1.26%, lower than the average of the financial institutions of Shandong's banking industry as well as the national average. In the Reporting Period, the Bank's provision coverage ratio is 216.05% while capital adequacy ratio reached 13.49%.
During the Reporting Period, the Bank achieved an operating income of RMB2.971 billion, representing a year-on-year increase of 23.82%, of which the net interest income of RMB2.447 billion accounted for 82.37%, representing a year-on-year increase of 1.07 percentage points, and the net non-interest income of RMB0.524 billion accounted for 17.63%, representing a year-on-year decrease of 1.07 percentage points. The Bank realized profit before taxation of RMB1.635 billion, representing a year-on-year increase of 16.09%. The net profit amounted to 1.262 billion, representing an increase of 17.49% compared with the same period of last year.
Retail banking business
In the first half of 2016, the Bank continued to implement the interface banking strategy which focused on "all-in-one cards" and "chain E-finance", and has successfully penetrated into the health care and public transport sectors, local communities, as well as large enterprises and businesses. Initial breakthrough was achieved in balancing assets and liabilities as the Bank has diversified its channels to secure a sizable number of customers and continuously enhanced its asset structure. At the same time, the proportion of VIP customer groups significantly expanded on the back of major events such as Kai Men Hong, a marketing activity held at the beginning of this year, and Hai Rong Li Cai Jie, as well as the use of data analysis for precision marketing. As of June 30, 2016, the number of retail customers of the Bank reached 3.0691 million, an increase of 281,500 compared with that at the end of the previous year. While retail customers remained growing in absolute number, customer structure was also continuously enhanced with an increasing proportion of mid and high-end customers. During the Reporting Period, the scale of existing assets held at the Bank by retail customers increased by 14.66% compared with that at the end of the previous year to RMB90.725 billion. The operating income contribution of retail business decreased by 0.55 percentage points year-on-year to 20.34%, the net non-interest income of retail banking business reached RMB160 million, representing a year-on-year increase of 82.36%, and accounting for 30.45% of the net non-interest income of the Bank as a whole, representing a year-on-year increase of 10.96 percentage points.
Corporate banking business
During the Reporting Period, the Bank continued to reinforce its advantages in corporate banking by driving business through product innovation, concentrating on high-quality and qualified credit assets, and making breakthrough in PPP projects and city development funds to further facilitate the development of government finance business. The Bank also leveraged its advantages in win-win innovative financing, financial leasing and factoring business and other portfolio business to further strengthen its foundation for the development of corporate banking business. As of June 30, 2016, the balance of corporate deposits reached RMB77.226 billion, representing 61.14% of the balance of various deposits and an increase of RMB7.298 billion or 10.44% compared with that at the end of the previous year. As at the end of the Reporting Period, the total corporate loans including discounted bills reached RMB59.694 billion, accounting for 73.74% of the total loans, representing an increase of RMB6.874 billion or 13.01% compared with that at the end of the previous year.
Financial market business
Addressing the complex macroeconomic situation and the challenges in the financial market, the Bank fully capitalized on the strong capital position following its listing by actively developing various types of asset investment businesses and increasing the rate of capital utilization. As of June 30, 2016, the assets under management of the financial market business reached RMB143.202 billion, an increase of 13.58% compared with that at the end of the previous year. Operating income contribution of the financial market business during the Reporting Period was 29.42%, a year-on-year increase of 5.13 percentage points.
In the context of the acceleration of marked-oriented interest rates and financial disintermediation, the Bank established business channels and platforms in the financial market, developed innovative cross-industry, cross-market and cross-product financial services and products, and addressed the operation pressure arising from scarcity of assets through the setup of asset business, endeavoring to increase post-listing return on assets and return on capital. As of June 30, 2016, the Bank's investment size was RMB99.947 billion, an increase of RMB15.166 billion or 17.89% compared with that at the end of the previous year.
In the first half of 2016, the Bank adhered to innovation-driven development to expand its business, establishing a multi-dimensional wealth management product system. Riding on the "Hai Rong Wealth" brand of retail wealth management products, the "Su Jue Su Sheng" brand of corporate wealth management products and the "Hai Ying" brand of interbank wealth management products, the Bank launched the "Qing Xin Gong Xiang" brand of wealth management products and the "Zi Guan Bao" brand of wealth management products, vigorously promoting the development of asset management "Interface Bank" business and expanding the sales channels and customer base of the Bank's wealth management products. As of June 30, 2016, the scale of wealth management of the Bank was RMB46.203 billion, a year-on-year increase of RMB15.456 billion or 50.27%. Its outstanding investment management capability and the diversified wealth management products have earned the Bank's asset management business high market recognition and reputation. The Bank ranked 5th nationwide and first in Shandong Province consecutively in the quarterly regional financial institution reports issued by CnBenefit in 2016.
At the same time, the Bank initiatively engaged in innovative business and facilitated its new investment banking businesses. In March 2016, the Bank became the only city commercial bank among the first batch of pilot banks to issue green bonds approved by the PBoC, and successfully completed the first tranche of 2016 Bank of Qingdao Green Bond with an issue size of RMB4 billion. In May 2016, the Bank became the only city commercial bank in Shandong Province to obtain the qualifications of B-Class lead underwriter for non-financial corporate debt financing instruments. In June 2016, the Bank was approved to engage in the basic derivative transactions business, further promoting its product and business innovation and satisfying customers' needs for hedging exchange rate risk and interest rate risk.
Distribution channels
To follow the trend of the rapid development of the mobile internet, the Bank speeded up the development and promotion of mobile finance during the Reporting Period, built three mobile finance applications including WeChat Banking, Haihui Life and mobile banking, and achieved all-round development. As of June 30, 2016, the volume of electronic banking transactions of the Bank reached 70.1005 million, up by 31.02% year-on-year, with a transaction amount of RMB631.286 billion, up by 26.62% year-on-year. Besides, the number of mobile banking users surpassed 650 thousand, up by 29.68%as compared with that at the end of the previous year. The Bank also expanded the range of online financing products and expedited the development and implementation of Internet finance. During the Reporting Period, the Bank launched the direct online financing system for mobile banking personal customers, improved the supply chain financing platform for supply chain businesses, and met the demand of both personal customers and supply chain corporate customers for instant online loans.
In aspects of new institution construction, as of June 30, 2016, the Bank had 105 outlets in ten cities in Shandong Province, namely Qingdao, Ji'nan, Dongying, Weihai, Zibo, Dezhou, Zaozhuang, Yantai, Binzhou and Weifang.
Mr. GUO Shaoquan, the Chairman and Executive Director of Bank of Qingdao Co., Ltd., said, "Looking forward, we will fully leverage advantages of diverse financing channels, regulated operations and enhanced brand image resulting from our listing in Hong Kong last year, develop traditional drivers including pan-wholesale, pan-retail, pan-asset management, and interface banking, proactively foster the development of new drivers including "Internet+" and "Commercial Banking+", calmly respond to the slowdown in economic growth. The Bank is presented with both challenges and opportunities in the year of 2016. With the launching of China's "13th Five-year Plan" and constant introduction of related policies, economic incentive effects brought by the "One Belt and One Road" strategy and the structural reform on the supply side will gradually reveal and create business opportunities to Bank of Qingdao. We will continue to build the most convenient retail bank; enhance the distinct "Interface Bank" model to improve the capability of acquiring customers in bulk; expand the scale of "One Belt and One Road" Financial Alliance and partner with the core corporations of the industrial chain to proactively extend credit in bulk to the enterprises; push forward the financial market business to facilitate the evolvement of asset management model; accelerate the innovation and development of financial market businesses and transformation towards investment banking businesses; continue to enhance risk management. I believe, leveraging our leading position in the banking industry of Shandong Province, the Bank will continuously promote long-term steady development and create the greatest value for shareholders."
About Bank of Qingdao Co., Ltd.
Bank of Qingdao Co was founded in November 1996. The Company ranked 353th among the Top 1,000 World Banks in 2016 in terms of core tier-one capital at the end of 2015, according to The Banker, a UK magazine. As of June 30, 2016, the Company had 105 outlets in ten cities in Shandong Province, namely Qingdao, Ji'nan, Dongying, Weihai, Zibo, Dezhou, Zaozhuang, Yantai, Binzhou and Weifang, including one head office, one branch and 68 sub-branches in Qingdao. The Company's distribution network expands across Shandong Province with Qingdao as its base. Benefiting from the national strategies like the development of Blue Economic Zone in the Shandong Peninsula and the "One Belt and One Road", the Company has developed a business model that is well aligned with the regional economy. Leveraging its inherent advantages, the Company operates in a professional and specialized manner to meet target customers' needs by providing quality and convenient financial products and services. The Company has adhered to rigorous risk management to maintain stable operations and sound asset quality and continued to promote long-term stable business development.
(1)In terms of total assets, total loans, customer deposits and total equity, as of December 31, 2014
Sectors: Daily Finance, Daily News
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