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Supplement: Bank of China seeking excellent and sustainable growth
(chinadaily.com.cn)
Updated: 2009-03-04 15:53 BOC intrinsically unifies intensifying Party building with the building of good corporate governance mechanisms and intrinsically ties democratic centralism with the development of the functions of the Shareholder Meeting, Board of Directors, Board of Supervisors and management and the democracy, scientism and institutionalization of decision-making is promoted. (II) Implementing the Scientific Outlook of Development, altering operational concepts and methods of development BOC has stuck to a long-term proactive operational guide, ascertaining such principals as giving priority to capital restraint, quality control, benefit checks, and strategic keys, to guide the whole bank system to transfer from extensive operations to intensive operations. Through the implementation of the quality and benefit-centered check benchmark, it intensifies capital restraint and quality control, guiding the whole bank to appropriately handle relations between business development and risk control, short-term interest and long-term interest, additionally promoting the inter-matching and dynamic balance of capital, return and risk. The BOC also implements special strategies for key regions and customers, making strong efforts to adjust to customer structure, business structure and income structure. It has ascertained 10 key provinces including Guangdong, Jiangsu and Zhejiang, and 40 key cities such as Beijing, Shanghai and Shenzhen and tilts in favor of the above 50 regions in finance, personnel, credit and high-tech resources. BOC gives full play to its advantages in international settlement, global credit line, cash management, and overseas syndicated loans for the purpose of expediting the development of overseas business. It adjusts and optimizes customer structure and establishes a key customer assessment system with earnings placed after riskk assessment as the integral part. By the end of 2007, the proportion for credit assets of Class A customers of domestic outlets was 50.6 percent, 21.5 percentage points higher than that at the end of 2003. Meanwhile, the BOC also has strictly adopted the currency credit policy and industrial policy of the state, actively adjusting and optimizing credit structure, introduces the "green credit" operational concept in the credit management flow and a majority of the newly-increased loan is injected into such sectors and projects supported by the state as: power, gas and water production and supply, communication and transport, warehousing and postal, wholesale and retail, and education. In the period from 2004 to 2007, the annual growth of the RMB loans of BOC were 10.3 percent, lower than the industry’s average level. By the end of 2007, the loan balance of BOC was 2,850.6 billion yuan, occupying 47.58 percent of the total assets (5,991.2 billion yuan) and the asset structure was further optimized. The income structure was also improved. The proportion of non-interest income in total income of BOC was 16.40 percent in 2007, the highest among their peers. BOC also pays attention to developing the advantage of its diversified business platform to promote the prosperity of a commercial bank, investment bank and insurance business. BOC (Hong Kong) steadily continues to march towards the strategic objective of building a leading financial service group in Asia. The investment bank business of BOC International also develops rapidly, and, with such businesses as fixed-interest yield, securities sale and derivative products develop in parallel. BOC also maintains a leading position in domestic bond issuance and is appraised as one of "The Most Reliable Top 10 Investment Banks" in the eyes of Chinese CEOs. Focusing on strategic investment, disposal of non-performing loans and property investment business, the BOC continues to develop vigorously. BOC Group Insurance Company and BOC Group Life Insurance also continue to lead the competition in terms of market share in Hong Kong, and BOC Group Insurance Company has even obtained important progress in the property insurance business in the Chinese mainland. BOC also successfully acquired Singapore Aircraft Leasing Enterprise, the biggest company in Asia and participated in the launch of Bohai industrial investment fund, China's first contractual type industrial funds. In 2007, the proportion of the revenue of such diversified businesses as investment bank, insurance and direct investment in the total revenue of BOC exceeded 10 percent. (III) Improve the manner of service by centering on customers BOC adopted “four-tier operation and four-tier management” in the early days of reform and opening up. It began to change its own organizational structure and business flow in 1998. It cancelled the Credit Business Department and International Business Department categorized according to discipline, but set up Corporate Business Department, Financial Institution Department and Retail Business Department according to the perceived nature of customers to directly serve the target customers. In the past five years, in line with the intensive and flat operation principle and the requirements of separation of the front, mid and background processing, BOC has further advanced its business flow integration and institutional reorganization for domestic branches, resultingly raising customer satisfaction. On the basis of sufficient survey and argumentation, it established a Corporate Finance, Individual Finance, Financial Market and Operational Service Headquarters in 2008 to integrate marketing and management resources and enhance the converging effect of customers, products and services. It further improves the matrix management style, strengthens the head office's strategic planning on said business lines, budget management and business associative action management, as well as customers and product management function. Tier 1 branches continue to perform various duties and responsibilities of regional operational management and administration center and are responsible for the overall operational performance in its jurisdiction BOC constantly innovates services and expands service channels. At the time of optimizing the physical layout of the outlets and improving the business structure and service functions of the outlets, it increases the investment in such self-service equipment as ATMs, making efforts to develop such new-type e-service channels as online banking and telephone banking, giving rise to a vertical customer service system. By the end of 2007, BOC had more than 13,000 units of various ATM equipment and 90% of the businesses migrated to self-service equipment. Although the business volume increased by large margins in 2007, BOC still was a bank with a rather short queuing time for business transaction. BOC also established 5 private banking centers, 400-odd asset management centers and above 1,000 asset management studios, offering standard and unified investment and asset management services to customers of different demand. As the only banking partner of 2008 Beijing Olympic Games, BOC exclusively offered financial services at all stadiums, venues, and designated places in seven Olympic hosting cities as Beijing and Tianjin by sticking to "Seeking Excellence, Customer Foremost, Fine Management and Unity and Collaboration" during Olympic period. As a result, various on-site service work operated well, with the service quality receiving unanimous praise from domestic and foreign customers, creating a record of zero compliant and zero errors, proudly displaying the good image of Chinese financial enterprise. Such good achievements can be attributed to BOC's "customer-centered" service manner. (IV) Advance HR management reform and establish a scientific performance management system Since reform and opening up, BOC has been promoting the transformation from traditional personnel management systems to modern HR management systems in line with requirements for the reform of the cadre personnel and labor salary system of the state from different periods. After share reform, the BOC gradually established a talent development and management system with flexible employment, promotion, compensation, and cultivation mechanisms, and effective encouragement and restriction mechanisms, in a sense, forming a strategic HR management system suiting the operation and management system of modern commercial banks. Firstly, it breaks up official rank standard, establishes a diversified post system, and expands a occupation development channel for various talents. Secondly, it breaks up “lifelong tenure” and establishes a competitive employment and flexible employment system. Thirdly, it changes the practice of eating from the same big rice-pot and establishes a marketized remuneration system and effective stimulation and restriction mechanism with job value at the core. Finally, it changes the traditional assessment method of overstressing on result and neglecting process, preferring a management system that values creation-oriented performance. In 2005, BOC won the "The Best HR Strategy Award in the Chinese Mainland" from Hong Kong Chinese Talents magazine. From 2005 to 2007, BOC was selected as "The Most Ideal Employer" by a renowned employer brand management company for three years in a row and topped domestic financial industry on the list. (V) Establish a comprehensive risk management concept and promote modern risk management system construction BOC constantly strengthens and improves an overall risk management system, especially since share reform, BOC actively implements “large risk” management strategy and carries out a comprehensive management on credit risk, market risk, operational risk and liquidity risk, etc.. In respect of credit risk management, BOC strengthens the risk policies and the independence of risk management and realizes centralized risk management earliest in china, focusing on credit approval, credit rating and risk classification audit. BOC strengthens the professionalization construction of risk management team and employs international professionals to serve the Group Director of Credit Risk (CCO), and improves the technical level of risk management and gradually increases the applications of quantitative analysis. In respect of market risk management, BOC develops "Market risk management system construction program" and defines the organizational structure and division of responsibilities of the market risk management, issues the "market risk management policy" and "market risk capital measurement method" and makes definite stipulations on value at risk(VAR), limit of present value of basis points (PVBP), Stop-loss Limit, pressure test limit and other key risk indicators(KRI). BOC preliminarily establishes the market risk measurement system and monitoring system and establishes market risk limit management framework and strengthens the identification, measurement, monitoring and control of the transactions and investment account market risks. (For more biz stories, please visit Industries)
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