China Development Bank
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| China Development Bank | |
|---|---|
| Type | Government-owned |
| Founded | 1994 |
| Headquarters | Beijing, People's Republic of China |
| Key people | Chen Yuan, Governor |
| Industry | Finance |
| Products | Banking |
| Net income | ▲ RMB 28.4 billion[1] (2006) |
| Employees | 3,500 personnel[2] |
| Website | www.cdb.com.cn |
The China Development Bank (CDB) (simplified Chinese: 国家开发银行; traditional Chinese: 國家開發銀行; pinyin: Guójiā Kāifā Yínháng) is a financial institution in the People's Republic of China (PRC) under the direct jurisdiction of the State Council. It is the only bank in China whose governor is a full minister. It is one of the three policy banks of the PRC, primarily responsible for raising funding for large infrastructure projects, including most of the funding for the Three Gorges Dam and Shanghai Pudong International Airport. The bank was established by the Policy Banks Law of 1994.
Debts issued by CDB are fully guaranteed by the central government of the People's Republic of China. CDB is one of the biggest issuers of bonds in the PRC.
The bank had RMB 1.5 trillion in loans outstanding as of the end of 2004. During 2004, the bank made a profit of about US $2 billion. The bank is the most profitable bank in China, and the second most profitable bank in Asia.
In year 2005 and 2006, China Development Bank successfully issued two pilot ABS products in domestic China market. Together with another ABS products issued by China Construction Bank, they have set the corner stone for a promising debt capital & structured finance market.
After governor Chen Yuan (formerly the executive deputy governor of the PRC's central bank The People's Bank of China) took over the bank in 1998, CDB has experienced tremendous growth in profit and reduction in bad loan rate. Currently, it is the most healthy bank in China with a bad loan rate of about 1% at the end of 2004. This is an extraordinary achievement for a Chinese bank considering that the four major state owned commercial banks all have high double digit bad loan rates.
CDB has about 3500 employees at the end of 2004, about 1000 of them work at the Beijing Headquarters and the rest are spread out in 32 branches throughout the country. The bank does not take private savings, and hence does not have thousands of local branches like other major banks in China do.
According to Michelle Chan-Fishel, program manager of the Green Investments Program at Friends of the Earth–US in San Francisco, CDB is the only Chinese bank to adopt its own environmental financing standards. She said: "Based on publicly available data, only one Chinese bank – China Development Bank – has adopted its own environmental financing standards."[3].
The China Development Bank under the supervision of the central government is tasked with the development of socialist market economic system and to propel China's concerted and sustainable economic and social development.[4]
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[edit] History
The China Development Bank was established in March 1994 to provide development oriented finance for government projects of national priority. It is under the direct jurisdiction of the State Council or the People's Central Government. At present, it has 32 branches and four representative offices across the country. The bank provides financing for national projects such as infrastructure, basic industries, energy and transportation.[5]
The main objective as a state financial institution is to support the macroeconomic policies of the central government and to support national economic development and strategic structural changes in the economy.[6]
In the last decade alone, China Development Bank has issued 1.6 trillion yuan in loans to more than 4000 projects involving infrastructure, communications, transportation and basic industries. The investments are spread out along the Yellow River and both to the south and north of the Yangtze River. Increasingly, China Development Bank is focusing on developing the western and northwest provinces in China. This could help reduce the growing economic disparity in the western provinces and revitalize the old industrial bases of northeast China.[7]
The bank also plays a major development role in alleviating infrastructure or energy bottleneck in the Chinese economy. In 2003 CDB had loan arrangements for or evaluated and underwritten a total of 460 national debt projects and issued 246.8 billion yuan of loans. This accounted for 41% of its total investment. CBD loans to "bottleneck" investments that the government gives priorities amounted to 91% of the total. It also issued accumulatively 357.5 billion yuan of loans to western areas and 174.2 billion yuan to old industrial bases in Northeast China. All these loans have substantially increased the economic growth and structural readjustments of the Chinese economy.[8]
Since 1998, the CDB led by Governor Chen Yuan has been introducing international financial standards and best practices into the bank. This is to reconcile the state's responsibility in providing credit with market performance and operating "within a market environment and banking framework". Hence it is driving reforms to ensure the bank is in line with international standards. This has resulted in the CDB performing very well. At the end of 2004, the bank's credit assets amounted to RMB 1378.6 billion, with current principal and interest recovery ratio of 99.77%, the indicator having maintained world-class performance for 20 consecutive quarters. The bank's non-performing loan ratio stood at 1.21%, down a year-on-year 0.13 percentage points. The coverage ratio of its risk reserves against non-performing loans hit 285%, and; its capital adequacy ratio reached 10.51%.[9]
The China Development Bank will continue to play significant role in reshaping the economy of the People's Republic of China by providing crucial national investment in high priority sectors of the economy. They have a mandate to reduce economic bottlenecks in basic and pillar industries, infrastructure, energy, communications and other sectors. In other words, to alleviate and finally eliminate resource and supply restriction "bottlenecks" and institutional "bottlenecks" through development-oriented finance. This is hope to increase the competitiveness of the economy, increase economic growth and employment for millions of people. The bank also promotes the principle of "Five Aspects Coordination." In the process of financing, CDB aims to promote corporate governance structure, enterprise system as a legal entity, cash flow management and credit management culture.[10]
[edit] Organizational structure
The Governor of the bank reports to the Board of Supervisors which is accountable to the central government. There are four vice governors and two assistant governors.[11]
[edit] Specialized departments
- Policy Research
- Business Development
- Financial Research and Development Center
- Credit Risk Management
- Credit Administration
- Investment Banking
- International Finance
- Large Corporate Lending
- Project Appraisal (3)
[edit] General departments
- Treasury
- Supervision
- Personnel
- Auditing
- Education and Training
- Operating Center
- General Logistics
- Retired Staff
- Comprehensive Planning
- Accounting and Finance
- Legal
[edit] Management
Full profiles available here.
- Governor Chen Yuan, born January 1945. Graduated with a Masters degree in Industrial Economics from the Graduate School of Chinese Academy of Social Sciences.
- Vice Governor Yao Zhongmin, born June 1952. Graduated with a Masters degree in Investment Economics from Central South China University of Finance and Economics.
- Vice Governor Wang Yi, born April 1956. Graduated with a Doctorate in Economics from Southwest China University of Finance and Economics.
- Vice Governor Liu Kegu, born May 1947. Graduated with a Doctorate in Finance from Northeast China University of Finance and Economics.
- Vice Governor Gao Jian, born August 1949. Graduated with a Doctorate in Finance from the Institute of Financial Sciences of the Ministry of Finance.
- Chief Compliance Officer Li Changfu, born January 1945. Graduated with a Major in Machinery Manufacturing from Shandong Institute of Farm Machinery.
- Assistant Governor Zhao Jianping, born in July 1953. Graduated with a Masters degree in International Corporate Management from the Management School of the University of Texas.
- Assistant Governor Xu Yiren, born January 1949. Graduated with a Masters degree in World Economics from the Central Party School.
[edit] References
[edit] External links
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