China Construction Bank Announced 2014 Q1 results

Beijing, 27 April 2014 – China Construction Bank Corporation (“the Bank”) (Shanghai stock code: 601939; Hong Kong stock code: 939) announced its operating performance for the first quarter of 2014 (note: unless otherwise stated, the data herein are calculated in accordance with International Financial Reporting Standards on a consolidated basis in RMB). As at the end of the first quarter of 2014, the Bank realized a net profit of 65,922 million, up 10.40% from the same period of 2013; the annualized return on average assets and annualized return on average equity stood at 1.67% and 23.89%, respectively.

Despite downward pressure in the macro economy, China Construction Bank achieved steady growth in operating performance for the first quarter of 2014. As at the end of March 2014, the Bank’s total assets increased by 778,238 million, or 5.07%, from the end of last year to 16,141,448 million; total loans and advances to customers increased by 331,071 million, or 3.85%, over the end of 2013 to 8,921,128 million; domestic corporate loans reached 5,619,871 million, domestic personal loans stood at 2,556,127 million, discounted bills were 85,243 million, Loans to customers of overseas entities and subsidiaries reached 659,887 million; net interest income grew by 11.80% from the same period of last year to 103,207 million; net interest margin stood at 2.81%.

In addition to achieving stable growth in operating performance, China Construction Bank continued to strengthen its risk management capability and stabilize its overall asset quality. Despite a complex operating environment, the Bank was able to forecast operating changes; it continued to reduce loans to industries with severe excess capacity via the optimization of its credit structure; in the meantime, the Bank also enhanced the integrated management and control of its overall credit risks, reinforced forward-looking risk management, continued to execute risk warnings and conduct examinations, and accelerated risk disposal for key areas and clients. As at the end of March 2014, China Construction Bank posted a non-performing loan ratio of 1.02%, slightly up by 0.03 percentage point over the end of last year; the ratio of allowances to non-performing loans stood at 260.21%, down by 8.01 percentage points compared with the end of 2013, demonstrating that the Bank’s overall credit asset quality remained stable.

China Construction Bank’s first-quarter earnings of the year indicated a good start for the Bank’s business performance in 2014 and also showed that the Bank has achieved growth while maintaining stability in a flexible and balanced manner. Although the Bank has seen some risk exposures, it has managed to keep the overall risks under control, contained the momentum of rebound in non-performing loans, and ensured sufficient liquidity. In addition, the Bank’s strategy of “integration, multifunction and intensiveness” has seen positive effects, while the integration of functions, frontline staff and marketing teams at outlets (the “three integrations”) has been further enhanced. Specifically in risk management, following reforms and adjustments made to risk and credit approval mechanisms, China Construction Bank further enhanced its overall risk management, clarified staff and management’s responsibilities for risk management and control, and boosted its professional competence in risk and credit approval management, all of which have laid a solid foundation for the Bank to operate steadily throughout the year of 2014.