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Best Bank Awards

China's best domestic bank 2017: China Construction Bank

China Construction Bank

Of the big four state lenders in China, none has done a better job of improving its image in recent years, at home and abroad, than China Construction Bank under chairman Wang Hongzhang. The Beijing-based financial institution is visible on advertising hoardings, on TV screens and in the pages of print magazines, touting its corporate, private and retail banking expertise in an increasing number of developed and developing markets.

Traditionally smaller and less influential than its biggest local competitors, Bank of China (BOC) and Industrial and Commercial Bank of China (ICBC), CCB is now arguably as systemically important as either. Its market capitalization, which was around Rmb1.52 trillion ($223 trillion) at the end of May, is more than 25% higher than BOC’s. Its non-performing loan ratio at the end of 2016 came in at 1.52%, below both ICBC (1.62%) and the final member of the big-bank quartet, Agricultural Bank of China (2.37%).

The bank has been cleverly diluting its presence in sectors that suffer from overcapacity (mining, cement, glass, shipbuilding), while expanding its funding of fast-growing, consumer-facing industries. Loans to struggling industrial sectors fell sharply last year, while domestic personal loans rose to Rmb4.34 trillion, accounting for 69% of all new lending in 2016. Outstanding credit-card loans rose 16% over the same period, to Rmb517 billion.

The good news has continued into the current year, with CCB reporting a 3.4% year-on-year rise in net profit in the first three months of 2017, driven by higher fee income, while net interest margins continued to stabilize.

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