Recently, China Construction Bank (“CCB” or the “Bank”) announced the release of its 2008 Corporate Social Responsibility Report (“the Report”). CCB was the first state-owned commercial bank in China to publish a Corporate Social Responsibility Report in 2006. This is the third annual report disclosing CCB’s corporate social responsibility achievements to different parties of the society. The Report was compiled in accordance to the requirements and guidelines laid by regulatory bodies, including the China Banking Regulatory Commission and the Shanghai Stock Exchange. It was audited and assured by KPMG, and reviewed and approved by the Board of Directors and Board of Supervisors of CCB prior to its publication. The Report illustrated the efforts of CCB in implementing the scientific development concept in 2008, its adaptation to the change in macro-economic measures and the complicated situation, and its achievements in persistently undertaking full corporate social responsibilities, further demonstrating the Bank’s in-depth and effective communication with all circles of the society and its pursuits in realising the blueprints of a harmonious society.

1.      Upholding prudent operation principles and increasing enterprise value

In 2008, CCB has been continuously deepening its internal reforms, optimising operational processes and enhancing its customer service and risk management capabilities, thereby creating munificent returns on investment to its shareholders and making contributions to promote the economic development of the society. As at the end of 2008, CCB realised an operating income of RMB267.507 billion (unless otherwise stated, the Group’s financial data set forth herein are from the audited 2008 financial statements of the Bank for its A shares. Unless otherwise specified, all financial data in the report are calculated in Renminbi), a growth of 21.89% over the previous year; realised net profit was RMB92.642 billion, an increase of 33.99% over the previous year; the return on average assets and weighted return on average net assets were 1.31% and 20.68% respectively; non-performing loan ratio dropped by 0.39 percentage points from last year to 2.21%; the income tax, business tax and surcharges to the State amounted to RMB42.892 billion; the social contribution value per share was RMB1.339.

2.      Expanding domestic demand to boost economic development

In 2008, CCB endeavoured to adapt to the economic situations and the changes in macro-control, and conscientiously implemented the State’s macroeconomic policies of “expanding domestic demand, promoting economic growth and making structural adjustments”. The Bank elaborated its traditional advantages to reinforce the support to infrastructure and civil engineering projects such as transportation, energy, urban development, ecological environment and post-disaster reconstruction with a basis of controllable risk. Meanwhile, the Bank adhered to the policy of “guaranteeing some loans while restricting others”; vigorously advanced the adjustment of its credit structure; reduced loans for industries with overcapacity or potential overcapacity. As at the end of 2008, the total amount of loans of the Bank was RMB3.79 trillion, and RMB521.786 billion of new loans were issued, representing an increase of 15.95%. New loans in the fourth quarter amounted to RMB166.96 billion, which was 32.00% of all new loans for the whole year. The increase in loans for infrastructure projects was RMB194.106 billion, representing an increase of 19.52%. Of which, the new loans in the fourth quarter amounted to RMB68.148 billion, which was 35.11% of new loans for the whole year. There were a cumulative of RMB64.459 billion of loans withdrawn, accounting for 121.86% completion of the withdrawal plan.

3.      Reaching out to disaster victims and all-out disaster relief efforts

After the 5.12 Sichuan earthquake, CCB resumed normal functioning immediately and launched a series of emergency response and special service measures in response to the extraordinary circumstances in the aftermath of the disasters which were shown in the case studies and photos in the Report. For example, customers in disaster areas who could not provide their bank cards or passbooks were allowed to withdraw a set amount from their deposits with either a valid proof of identity or using their teller passwords. No fees were charged for the transfer of disaster relief funds; no interest penalty was levied for disaster affected customers whose loan repayments were overdue; and special services were provided for the transaction, transfer or inheritance of financial assets of earthquake casualties. An “Express Credit Channel” was established by CCB for receiving loan applications for relief work at all times, and for granting timely approvals and priority arrangements. By the end of 2008, a total of RMB222.962 billion of quake relief credit had been issued to enterprises in the disaster areas to strongly support the post-disaster reconstruction work. Regarding the blizzards and frosts struck in areas in southern China during early last year, the Bank immediately provided loan and other financial services for relief emergency needs to disaster stricken area. In addition, RMB12 million was donated to support the post-disaster reconstruction work.

4.      Providing quality services to support the Beijing Olympics

2008 was designated as an “Olympic Service Year” by CCB. CCB adopted effective measures in civilised norms, service innovations, construction of the Bank’s physical environment, system security and business training, bank-wide preparedness plans were developed and exercises were carried out to raise emergency handling capabilities in the Bank. In CCB retail branches located in Olympic cities, business hours were extended. The self-service facilities achieved over 99% of rate of operation. The 95533 Phone Banking Service Centres provided multi-lingual services in English, Korean and Cantonese to its customers. 2,886 POS booths were installed, offering multi-denomination money exchange services. CCB achieved its targets of zero major failures and zero effective complaints. For this, the Bank was presented by the China Banking Regulatory Commission with the “Award for Organising Systematic Activities for the Provision of Civilised and Standardised Services for the Beijing Olympic Games by the China Banking Industry”.

5.      Implementing the “Green Credits” to provide strong support to environmental protection

In 2008, CCB continued to insist on the strict implementation of national environmental protection laws and regulations. In credit assessment, the Bank strictly adopted the environmental “single-vote veto system” so as to severely restrict lending to high energy consumption and high pollution industries. CCB actively supported projects conducive to environmental protection and ecological improvement. As at the end of 2008, the balance of loans to green credit projects was in excess of RMB100 billion. The Bank also supported environmental protection by tapping its own business and strengths and launching innovative products. For example, the CCB Yichun City Branch in Heilongjiang issued the first ecology-concept bank card—the “Red Pine Long Card”. The Bank also unveiled a number of new energy-conservation measures internally, such as promoting the recycling of office supplies, strictly controlling the use of company cars, lowering energy consumption in the office, and constructing an energy management platform. By continuously furthering conservation activities throughout the Bank, it was able to support the State’s energy conservation and emission reduction policies through practical action.

6. Attentive to social concerns and promoting the improvement of people’s livelihood

In 2008, in response to the State’s policies to support the farming industry, farmers and rural areas (the “Three Rural Issues”) and to explore new modes of serving the “Three Rural Issues”, CCB launched the innovative small farming household loans. The newly issued agriculture-related loans amounted to RMB105.231 billion, with a year-on-year increase of 31.37%. CCB has also set up its first village bank. The Bank continuously introduced and improved mortgage loan measures in an effort to solve the problem of housing financial services for low-income families. To help the growth of small enterprises, CCB cooperated with companies including Alibaba and launched innovative products and services such as “Internet Joint Guarantee Loans”, “Quick-Finance” and “Supply Chain Financing”, etc. The balance of loans to small enterprises has grown every year. As at the end of 2008, the balance of personal residential mortgage loans was RMB615.429 billion, while the balance of provident fund loans was RMB288.967 billion. The new loans to small enterprises surged by 19.17% year-on-year.

7.      Respecting staff rights and concerning staff development

CCB protected staff rights and raised staff satisfaction by institutionalising such systems such as the Staff Representative Assembly and labour union, and reduce their workload by streamlining the process of the counters, improving the shift arrangement of retail branches and simplifying the written register book in all tiers of branches. To fully staff our core personnel team, we intensified the use of a leadership quality model and a post quality model; adopted an international vision in our efforts to improve personnel development and selection mechanisms; and tested out a model for facilitating personnel growth through the formation of task teams. In 2008, 22,000 training sessions were conducted to provide 1.0309 million staff-times in training for 2.364 million staff-days in the Bank. Of which, training to front-line staff hosted directly by the headquarters reached 107 batches, with a year-on-year increase of 11%.

8.      Participating in public welfare causes and paying back to society with sincerity

In 2008, CCB actively engaged in public welfare causes and in helping the distressed and supporting those in peril. The Bank made donations totalling RMB211 million approximately, including staff donations. It continued to cooperate with the China Education Development Foundation in the “Build for the Futures – CCB Sponsorship Programme for Impoverished High School Students” and granted a sum of RMB20.031 million to the needy high school students. It also continued to cooperate with the China Women Development Foundation in running the programme for “Impoverished Mothers of Heroes & Exemplary Workers in China” and gave out RMB4.9925 million to the impoverished mothers. Moreover, the Bank donated RMB12 million to areas in southern China affected by blizzards and frost. To promote cultural exchange between China and the world, CCB sponsored the Beijing International Music Festival for the third consecutive year.

CCB’s continuous and effective effort in undertaking corporate social responsibility has won extensive recognition from all quarters of society. The Bank received over 10 awards including the “Best Social Responsibility Enterprise Award for the 30 Years of Opening-up and Reform" and the “Domestic-funded Enterprise with Greatest Social Care” award. It was also placed 12th in the CSR Asia Business Barometer ranking for 2008, the highest position among all Chinese banks.

In 2009, in face of the tougher challenges ahead, CCB will faithfully undertake its corporate mission to continue stepping up the pace of strategic transformation, to relentlessly explore new formats in taking up corporate social responsibility, to strive to enhance its brand image and to make bigger contributions to build a harmonious society.

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