Bank of Huzhou
Bank of Huzhou was established in 1997 in the eponymous economically vibrant, medium-sized city in east China’s Zhejiang province. With total assets of Rmb52 billion ($7.5 billion) at the end of 2018, it is a small bank by Chinese standards. Yet it has emerged as a leader (at least among the numerous regional commercial banks in China) on multiple fronts in green finance.
Bank of Huzhou considered green finance a priority from early on. Among the domestic city commercial banks, it was the first to create a separate green finance division and it established a green finance working committee under the direct control of its president. It was also the first to open outlets dedicated to supporting small and micro businesses with green finance.
What is even more impressive is that it was the first city commercial bank to hammer out an asset classification system for green credit. In this system, loan applicants are colour-coded according to their environmental friendliness (green, blue, yellow or red), allowing the bank to provide green finance to applicants and to control the associated credit risks more effectively.
With support from its leaders and an effective management system, the bank boosted the share of green loans in its total lending to more than 13% by the end of 2018. Meanwhile, the non-performing ratio for green loans is well below the average level of 0.66% for the bank’s total lending.
Bank of Huzhou stands out because of its pursuit of international best practices in green finance. In 2018, it formed a strategic partnership with the IFC in preparation for adopting the Equator Principles. The move will make it the third Chinese bank to apply the principles, following Industrial Bank and Bank of Jiangsu.
Last year, Bank of Huzhou became a member of the United Nations Environment Programme – Finance Initiative (UNEP FI) as a demonstration of its commitment to sustainable finance.