Year 2008 is the 1st fiscal year after UCB acquired UCBC. UCBC upheld its service motto “people comes first” and “strive for excellence”. It provided premium services to both its new and old customers and promoted trades between China and the States, as well as Mainland China and Hong Kong through its banking service network. It built a finance bridge for its customers, especially SME customers with its high-standard banking services.
To improve the efficiency of supervision and the consistency of the management of banking group, as required by our parent bank, we decided to improve our internal management structure and system integration in a orderly fashion, starting from improving corporate governance and internal control.
Under the board, we established market risk committee, operation risk management committee and compensation committee, and strengthened the role of audit committee, related party transaction control committee and credit committee, to fully fulfill Board’s duty of internal control and risk management and thus perfect our corporate governance structure of the bank.
Under the premise of complying with Chinese laws, we adopted the management techniques and notions from our parent bank, completely updated our banking policies and procedures, and effectively enhance the Bank’s risk management. With the perfection and implementation of various internal control system, our daily operations become more and more effective, and our risk control/mitigation has achieved visible results.
After UCB becomes the sole shareholder of UCB, the synergy from the acquisition has enabled UCBC to achieve great expansion in the SME sector. As a subsidiary of UCB, we have provided more development opportunities to those American companies who invest in China, which enabled us to provide more financial services to facilitate trades between the two countries. UCBC shall continue to expand its business scope and product category to be committed to its SME as well as consumer banking sector.
In early 2008, with the approval of China Banking Regulatory Committee, UCBC has engaged in RMB services to domestic companies, which enabled us to further expand financial services to SMEs and launch our services in the Middle West areas. It also helped us attract more deposit and make our working capital more versatile and stable. As of the end of 2008, the proportion of our RMB services in total asset had increased to 40.43%. And 72.97% of our profits come from RMB businesses.
In 2008, we timely adjusted our business development plan and credit policy, improved internal control and tightened the cost management. Thanks to the support from our customers and the efforts of our staff, we made steady development in all of our businesses. The bank’s asset adequacy rate reached 41.03%. Asset scale raised by 33.01%. Net profit reached 4.55 million USD.
To our delight, facing the severe economic environment of 2008, we still managed to made great progress in our portfolio. Our total deposit has risen by 66%. The fast increase in deposit balance has greatly improved our deposit-loan ratio. Under the current circumstances, the increase in portfolios is rare, and because of that, it is very valuable.
In 2008, with the double impact from both domestic natural disasters and global financial crisis, Chinese economy had experienced fluctuations, so does the environment where SMEs operate. As a bank committed to SMEs, we also feel the influences on our business performance and asset quality. As a result, we raised the ratio of calculating reserves and took a cautious approach in case of economic changes and the increase in bad assets.
We value our social responsibilities. We know that today’s policy would not only affect today’s living environment, but also affect future generations. To prevent environment deterioration and social consequences, we integrated pollution prevention and emission reduction into one of our credit assessment criteria, we cooperate with international financial institutions to provide loan support for companies that implemented pollution prevention and emission reduction measures. The results proved that our efforts had created good environmental benefits, achieved good financial return, and effectively promote sustainable development of both the companies and the society.
With the increase of UCBC’s business scale and market share, UCBC plans to open more subsidiaries along the east coast and in the deep west of China to provide financial services to SMEs in both the developed and under-developed regions. In the next 2 years, we plan to open a new branch in Shandong and a new sub-branch in Shanghai, in the next 5 years, we plan to increase the number of branches to 5 and the number of sub-branches in Shanghai to 3.
Here, I’d like to thank our customers for their loyalty and support. And our employees for their dedication and hard work. I shall also express my most sincere appreciation for the support of the regulatory institutes of China, especially China Banking Regulatory Committee.
In hard times, we shall actively seek solutions to all our problems and trudge forward by bravely promoting structural adjustment. We saw a bright future for Chinese economy and its fast expanding market. And we shall continue to provide high quality financial service to our Chinese SME customers.
Chairman: Thomas Wu
