Annual Report 2012

3 CHAIRMAN’S STATEMENTDear shareholders,In 2012, facing the complex economic situation at home and abroad and the fierce market competition, the Group earnestly followed thegovernment’s macroeconomic control measures and regulatory requirements by supporting the development of the real economy vigorously andpromoting strategic transformation continuously. With deepened internal reform, and strengthened risk management and internal control, variousbusinesses maintained a stable and rapid growth.In 2012, the Group’s total assets reached nearly RMB14 trillion, while net profit for the year reached RMB193,602 million, up 14.26%year-on-year. The return on average assets and the return on average equity were 1.47% and 21.98% respectively. Our key financial indicatorscontinued to lead the market. The Board has recommended a final cash dividend of RMB0.268 per share.We vigorously supported the real economy, and our credit structure continued to improve. In 2012, the Group timely adjusted business policies,allocated credit resources appropriately, and enhanced credit management to support the key national projects, the livelihood sector and theweak links in the economic and social development. The increase of loans to infrastructure sectors accounted for 27.04% of the increase incorporate loans, while loans to small and micro businesses increased by 17.97%, and agriculture-related loans increased by 21.43%. Wemaintained the leading position in terms of the increases in personal residential loans and credit card loans. The Group performed proactivecredit management by actively controlling loans to industries with excess capacity, local government financing vehicles, and real estate industry.We maintained steady progress in integrated operations, with rapid development of overseas business. The Group has initially establishedthe integrated operation platform, leading the industry in terms of the variety of non-bank financial licences. At the end of 2012, the totalassets of all the subsidiaries reached RMB260,839 million, and made a net profit of RMB2,139 million. The Group deployed the operatingstrategy of “closely following the customers and accelerating localisation” for its overseas business, and expanded its network through bothself-establishment and mergers and acquisitions (M&A). At the end of 2012, the total assets of overseas entities exceeded US$80 billion.CCB London successfully issued the first London offshore RMB bond of RMB1 billion. Melbourne branch opened successfully and thepreparations were accelerated for the opening of subsidiary banks in Dubai and Russia, or branches in Toronto, Taipei, San Francisco, Osaka andLuxembourg.We fully promoted the building of a multi-functional bank, with rapid progress in strategic emerging businesses. The Group strengthened policyguidance and increased resources to strategic businesses, leading to the sound and rapid development of electronic banking, pension, privatebanking and other businesses. In 2012, the number of customers of personal online banking increased by 41.07%, and that of mobile phonebanking by 78.68%; the ratio of the number of transactions through electronic banking to that through the front desk was 270.30%, up 63.58percentage points over 2011. The e.ccb.com platform was successfully launched, with accumulated trading volume of RMB3.5 billion in thecorporate mall and financing volume to the merchants of nearly RMB1 billion. The pension business ranked first among peers in terms of theincrease in assets under custody. The Group issued a series of innovative products for private banking customers, with an increase of 30.19% intheir financial assets.We optimised the building of channels and mechanism, and promoted intensive operation. In 2012, the Group made efforts to improve itsnetwork distribution. The number of domestic operating entities increased by 540 to 14,121, and the number of ATMs increased by 11,323, bothranking first among its peers in terms of the increase. The Group accelerated the building of comprehensive operating entities, by focusing on thefull functions of the outlets, frontline staff and marketing teams, to further improve the efficiency of using network resources. The Group deepenedthe separation between front desk and back offices, simplified business processes, and improved efficiency, with greatly shortened average timefor instant customer service. The Group also accelerated the integration of business functions and service channels for telephone banking, toimprove customer experience and reduce operating costs.We continued to refine risk management and internal controls, and the asset quality remained stable. In 2012, the Group strengthened theenterprise-wide risk control, and further specified and standardised the framework and content of comprehensive risk management. It enhancedrisk management over key areas such as industries with excess capability, government financing vehicles and real estate sector, and furtherimproved the risk management standard for wealth management business, off-balance sheet activities, and overseas and country-specificrisks. The Group strengthened the building of its internal control system, by establishing a new department to assume the internal control andcompliance responsibilities, and optimising the internal control system, methods and processes. At the end of 2012, the non-performing loanratio was 0.99%, a decrease of 0.10 percentage points from the previous year.We promoted the implementation of capital management measures, and the capital base was further consolidated. In 2012, the Group improvedthe rules related to the capital management measures, to ensure its smooth implementation and a stable transition. The Group proactively carriedout research on innovative capital instruments, and successfully issued subordinated bonds of RMB40 billion. The Group seized the opportunityof implementing the new capital management measures to enhance its business transformation and structural adjustments, accelerate thetransformation towards more intensive use of capital, and improve the efficiency of capital utilisation. At the end of 2012, the capital adequacyratio and core capital adequacy ratio increased to 14.32% and 11.32% respectively.10 China Construction Bank Corporation annual report 2012