China Development Bank indicated in its recently released 2020 Annual Report that the Bank has made solid efforts to coordinate COVID-19 prevention and control and socio-economic development throughout 2020 by increasing credit allocation to support the development of the real economy in a targeted and effective manner. The bank has issued domestic RMB loans of 2.85 trillion yuan, up by 1 trillion yuan. The Bank’s total assets exceeded 17 trillion yuan by the end of 2020, with a non-performing loan ratio of 0.79%, indicating that asset quality remained stable.
The Report disclosed the bank’s efforts in support of the development of new infrastructure, new urbanization initiatives and major projects: as of year-end 2020, the bank’s loan balance remained at an industry-leading level of 865.7 billion yuan for the railroad industry; 2.2 trillion yuan for the highway industry; 1 trillion yuan equivalent for the power industry; 495.4 billion yuan for the water resources industry—maintaining its position as the major investor in the industry; and 720.6 billion yuan for the urban rail transit industry. Throughout the year, a total of 55.3 billion yuan was issued as new infrastructure loans.
In terms of coordinating COVID-19 prevention and control and socio-economic development, the bank was the first financial institution to issue emergency loans for COVID-19 prevention and control by establishing a rapid response mechanism for emergency financing for COVID-19 prevention and control, disbursing 31.5 billion yuan in 2020. It also introduced two special working capital loan programs for resumption of work to support new and ongoing projects in the areas of infrastructure development, manufacturing and livelihood, with an annual disbursement of 468.1 billion yuan.
To support the fight against poverty, China Development Bank has released 244.5 billion yuan in loans for precision poverty alleviation in 2020, providing strong support for disadvantaged areas to overcome the impact of COVID-19 and disasters and to achieve comprehensive and long-term poverty eradication. Among this, 60.4 billion yuan of precision poverty alleviation loans were channeled to parts of Tibet autonomous region, Xinjiang Uygur autonomous region, and parts of Sichuan, Yunnan and Gansu provinces, as well as other areas in deep poverty. A total of 33.5 billion yuan were granted as student loans to support 4.5 million students with financial difficulties.
In terms of supporting green development, the bank supported pollution prevention and control and promoted environmental management and ecological restoration in key regions. As of year-end 2020, the bank’s green credit balance exceeded 2.3 trillion yuan, putting it at the top of the domestic banking industry.
In order to reduce financing costs to benefit the real economy, the Bank rolled out 22 special preferential interest rate policies in six categories to support regions, industries and companies hardest hit by the pandemic. It implemented a fee reduction and interest concession initiative, and increased efforts to grant deferment to companies severely impacted by the pandemic, and took multiple measures to make concessions to real economy entities, totaling 33.5 billion yuan for key industries, sectors and clients over the course of the year.
"China's economy faced the double impact of both the COVID-19 pandemic and the external environment," said Wang Yiming, vice president of China Center for International Economic Exchanges and member of the Monetary Policy Committee. "According to the bank's Annual Report, credit allocation to the real economy has increased significantly in 2020, with more targeted loan allocation backed by the pragmatic and effective policy and initiatives introduced. Despite unfavorable internal and external conditions in 2020, it is no small feat for the bank to have issued domestic RMB loans of 2.85 trillion yuan and increased its RMB loan balances by 1 trillion yuan. This reflects the commitment of a state-owned development financial institution in making counter-cyclical adjustment during critical times."
Hu Bin, Secretary of the Party Committee and Deputy Director-General of the Institute of Finance of the Chinese Academy of Social Sciences, said, In the face of the negative impact of the pandemic on the business operations, China Development Bank has vigorously supported the recovery of the real economy in 2020 by proactively reducing interest rates and fees to benefit the real economy, particularly small- and medium-sized enterprises affected by the pandemic. Nonetheless, data from the Annual Report, such as the ratios of non-performing loans, loan provision, capital adequacy and net profit, show that the bank's operating indicators remained favorable in 2020, implying a stronger foundation for healthy and sustainable development.
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