Three years of grinding sword Citic Bank knocks international first door

⊙ writer Miaoyan at the end of 2006, the three major state-owned commercial banks represented by BOC, CCB and ICBC took the lead in the Overseas acquisition war. Subsequently, Minsheng Bank, the Bank of China, CMB and other domestic banks, also started overseas, and in 2007, the emergence of domestic financial institutions overseas acquisition of a small climax.　　At this time, has completed A+h listed CITIC Bank has not been involved in this round of overseas mergers and acquisitions of the tide. It was not until Citic Bank May 10 announced its intention to buy Citic China.　　Originally, is the old saying: "Three years, blockbuster", these three years, Citic Bank has been in the dark layout and waiting for the best time.　　⊙ Miaoyan The foresight of Bank's overseas takeover and Citic Bank if the most active banks in overseas mergers and acquisitions are to be selected, Citic Bank may absent, but Citic is a well-deserved choice if it is a smart bank for overseas acquisitions. Industry analysts pointed out that Citic Bank did not immediately after the listing of overseas acquisitions, because it knows a little: "Maito."　　In fact, Citic Bank has accumulated a lot of capital after the listing, which is the best preparation for the acquisition of Citic China Gold.　　Citic Bank's 2008 annual report showed that Citic Bank achieved more than 60% of net profit growth in 2008, with an average return on total assets and an increase in average equity returns, with earnings per share reaching $0.34. The data showed that CITIC Bank's 2008 profit amounted to 17.746 billion yuan, an increase of 35%, achieving net profit of 13.32 billion yuan, a 60.68% increase from the previous year. Some analysts believe that the sharp increase in the net profit of Citic Bank, from the driving factor, mainly due to the adjustment of income structure optimization, profit assets, intermediary business income growth, as well as good cost control, the continuous decline in cost-income ratio. As a matter of fact, the profitability of CITIC Bank has increased and its overall competitiveness has been enhanced since April 27, 2007, when it was listed in both Shanghai and Hong Kong.　　2008 net profit was more than 2006 years and 2007 two years of the sum, earnings per share than the previous year growth of 47.83%, three consecutive years of significant growth. The 2008-year CITIC Bank's provision coverage rate exceeded 150%. The company's annual report shows that the provision of CITIC bank coverage reached 150.03%, a significant increase of 40.02% per cent from 2007, which will help CITIC Bank to operate steadily in 2009 to guard against financial risks. In addition, Citic Bank continued to maintain profit growth while the non-performing rate continues to show a downward trend, to 1.36%, down 0.12%.　　This year, Citic Bank's capital adequacy ratio reached 14.32%, the core capital adequacy rate reached 12.32%, in the same commercial banks in the first, reflecting a very strong ability to resist risk.　In addition to vigorously enhance its own financial indicators, Citic Bank also tightly grasp the opportunity to the most advantageous Shing, international business and retail banking business bigger and stronger.　Statistics show that 2008, in the international financial market continued turbulence, domestic and foreign financial environment deteriorating situation, Citic Bank in the face of difficulties, management actively seek solutions, expand thinking, and strive to create business opportunities, effectively improve the ability to deal with external challenges, in the maintenance of Shing, international business leading edge of the premise,　　The business grew well and stepped into a steady stage of development. Shing, Citic Bank deposit and loan scale continued to expand, to a historic level, for two consecutive years on the increase in public deposits of more than 140 billion yuan, with a solid and effective basis to continue to lead in the same industry.　　At the same time, the rapid development of investment banking, auto finance and trusteeship, which represents CITIC Bank's emerging Shing, has also contributed to Citic Bank's leading position in the same trade. International business is the traditional advantage of Citic Bank business, in 2008 to maintain a healthy development, the international settlement amount of 131 billion U.S. dollars, four consecutive years of growth rate of more than 40%, to become the only one import and export receipts and remittances into the hundreds of billions of dollars club of small and medium-sized joint-stock commercial banks.　　Capital Capital market business also withstood the severe test of domestic and foreign financial market turbulence. In addition, the pace of development of retail banking business accelerated, the foundation has been further compacted.　　While maintaining the growth of the savings business, Citic Bank has played the wealth management brand advantage, the wealth management product sells 147.9 billion yuan, the growth 43% year-on-year, in the medium and small-sized joint-stock Commercial Bank continues to maintain the leading position. Private banking is also booming with more than 2000 customers.　　Credit card issuance exceeded 7.5 million and grew by 79%, becoming a bright spot in the 2008. At the same time, CITIC Bank expanded its network quickly. In 2008 alone, there were 5 branches and 57 sub-branches in Nanning, Harbin, Putian, Nantong and Luoyang.　　As at the end of 2008, the total number of CITIC Bank institutions has reached 544, including 30 branches, two-level branches 20, 493 sub-branches, 1 finance companies.　　All this makes Citic bank to buy Citic China Gold when the real "array".　　Chen Xiaoxian, Citic Bank president, said in an interview with the author that although this year's international and domestic situation is full of challenges, he is still optimistic about CITIC Bank's earnings prospects. As a strong backing of Citic Bank, CITIC Group has provided great help to Citic Bank. In 2004-2006, CITIC Group injected 2.5 billion RMB, 8.6 billion RMB and 7.4 billion RMB into Citic Bank.　　Because of its own securities, trusts, insurance and other comprehensive financial platform, CITIC Bank 2007 when the market, domestic and foreign investors are very optimistic about this. Citic Bank after the IPO, CITIC Group has long been brewing the idea of the integration of its business has been accelerated to cash in, and through the relevant arrangements to privatize its Citic National gold. When I interviewed Citic Group chairman Citic during the two sessions this year, Citic said that the important intention of privatizing Citic is to integrate its banking business and to play the role of Citic and Ka Wah Bank's offshore platform.。 Citic Group, in November 2008, exchanged a share of Citic bank shares with Citic China, and 2.16 Hong Kong dollars in cash to complete the privatisation of Citic and the withdrawal of Citic China's listing status.　　At the same time, Citic China Gold to Citic Group, BBVA sold its holdings of CITIC Bank 15% of the rights and interests, simplifying the ownership structure, for the next step of Citic Gold into Citic Bank prepared. "Timing, geography, people and" the decisive shot under the industry said that a few years ago, the internationalization of domestic banking is mainly to "please come in" mainly, and in recent years, the internationalization of domestic banks gradually show the "go out" characteristics. To support the core driving force of "going out" is to follow the internationalization of domestic enterprises, extend financial services to the international market, on the other hand, it is also the internationalization demand of domestic financial capital.　　With the rapid accumulation of financial capital in China, these financial capitals also need to look for profitable space in the international market.　　On the acquisition of Citic, Citic Bank vice President Cao Tong described it as "an acquisition of an appropriate object at a suitable time, at a suitable price". Because of its unique geographical location and the culture of one vein, Hong Kong has often become the first stop for the internationalization of domestic banking. By choosing a suitable international platform in the Hong Kong market, the expansion of domestic banking in Southeast Asia, Latin America, Africa and Europe and America is a quicker strategic path.　　Citic National Gold, headquartered in Hong Kong, is the flagship of Citic Group's financial operations outside China.　　CITIC Group regards the financial services industry as the core of the overall business development, so CITIC Gold and its subsidiaries and major associates play an important role in realizing Citic Group's ambition to become an internationally competitive China's leading financial company. Citic's main asset is Citic Ka Wah Bank, which is strongly complementary to CITIC Bank's business. Ka Wah Bank, a Hong Kong local bank with 27 branches in Hong Kong, has a certain brand name in Hong Kong and Citic Ka Wah Bank has branches in the mainland, Macau and the United States. It is understood that at the end of last year, Citic National gold total assets of about 150 billion Hong Kong dollars, of which, the Ka Wah Bank loans of HK $74.2 billion, deposit of 99.5 billion Hong Kong dollars, non-performing loans of HK $1.38 billion, adverse rate of 1.89%.　　Despite the impact of the financial crisis, Ka Wah Bank maintained a good performance last year. In addition, CITIC China Capital Holdings Limited (CITIC Capital) and CITIC International Asset Management Limited (CITIC assets). Among them, Citic Capital focuses on the Chinese market Investment management and consultancy business, the core business including direct investment, real estate funds, structured finance, asset management and special investment, the total management of the fund is 2 billion U.S. dollars; Citic Asset is a direct investment and fund management company, currently, The company's direct investment business is mainly focused on China's real estate projects, listed companies and unlisted shares, and the management of funds are enterprises and real estate funds, private equity investmentFunds.　　Cao Tong pointed out that it is a number of financial licences, so that Citic Bank in the acquisition of Citic, the internationalization of the platform is more perfect, but also for Citic Bank's next internationalization, provides the imagination space. It is understood that Citic China's 2008-year profit amounted to HK $12.7 billion, if the one-time transfer of Citic Bank stake in the factor, the profit of 2.1 billion Hong Kong dollars.　　On the capital side, Citic China's net worth at the end of last year was 38.2 billion Hong Kong dollars, and capital was plentiful. In addition, Citic Bank chooses Citic China Gold, also because the scale of Citic China Gold is very suitable for Citic Bank's "appetite". At present, Citic National gold assets of about 150 billion Hong Kong dollars, in volume is very suitable for CITIC Bank. "If Citic is too small, not enough on the talent pool, and imperfect in the system, it is less attractive to CITIC Bank; if it is too big, it may be difficult to integrate with Citic Bank's first international acquisition," Cao Tong said. Citic and Citic are very culturally close, as they are Citic Group's company.　　As a result, the cost of integration after the acquisition will be much lower than that of other banks. The acquisition was the first Cross-border takeover of a domestic bank since the financial crisis broke out. The industry has pointed out that at present, the financial crisis to the existing financial institutions, including the financial institutions in Hong Kong to see the impact of the more clear, at this time acquisition makes it easier to grasp the acquisition target. In addition, China's domestic enterprises are also starting a new round of internationalization trend, at this time the internationalization of domestic banks will be injected with a new international meaning.　　Meanwhile, the Cross-border settlement of the renminbi is being launched, and Hong Kong's status as an international financial centre is bound to become the first area of cross-border settlement of the renminbi, providing new business opportunities for CITIC Bank's internationalization business. What makes banking analysts most concerned is the price of the acquisition. According to the announcement, the acquisition of the price is close to 13.6 billion Hong Kong dollars, the net rate of 1.43 times times the market. In the Hong Kong market, for the acquisition of control rights, 1.43 times times the price is very low in history. In addition, 1.43 times times is also the Citic Group at the end of 2008 to privatize Citic National gold cost price. Citic, on the one hand, is cashing in on its commitment to CITIC, which is also being bought at the cost of privatization.　　And since the local banks available in Hong Kong are already scarce, it would be difficult for Citic to take a controlling takeover at such a price if it were not for the opportunity of the CITIC Group's privatisation of Citic National gold.　　A banking analyst pointed out that Citic Bank's initiative and leeway are much better than the cost of overseas acquisitions by other banks. Solid Iron Triangle: The synergy effect of Citic Bank, Citic China and BBVA will be gradually reflected from the ownership structure, after the completion of the acquisition, Citic Group and BBVA (i.e. BBVA) is the main shareholder of Citic Bank, of which BBVA holds 10.07% of Citic Bank's shares. After the acquisition is completed, BBVA and Citic Bank will beThe shareholders of the letter of state Gold hold 29.68% and 70.32% of their shares respectively. Earlier, at the end of 2006, BBVA also acquired 5% of Citic Bank's shares, and Citic China Gold 15% of the shares, then, in November 2008, BBVA also increased its holdings of CITIC Bank and Citic National Gold Holdings to 10.07% and 29.68%.　　After the acquisition is completed, the synergy between Citic Bank, Citic China and BBVA will be stronger than the Iron triangle. Cao Tong Earlier in the interview with the author frankly, Citic Bank has the opportunity to buy Citic China Gold, and holding the following three characteristics of the financial institutions, to CITIC Bank to bring a rare opportunity for internationalization.　　Through the acquisition of Citic China Gold, Citic Bank will take the forefront of domestic banking internationalization. In addition, analysts said the acquisition will also enhance CITIC Bank's Cross-border service capabilities. Historically, Citic Bank has always been at the forefront of domestic banks in international business and has always been ahead of similar banks in international settlements. The acquisition of Ka Wah Bank, in addition to its extensive network in Hong Kong, also has a branch in Macau, in the United States has two branches.　　So the acquisition will strengthen CITIC Bank's ability to provide cross-border services in Hong, Macao, Southeast Asia and the U.S. market. Third, the acquisition will optimize the Citic Bank system, access to international talent, and thus enhance CITIC Bank's core competitiveness. Ka Wah Bank is located in Hong Kong, a set of international advanced Management System and a group of international talent team, which is essential for Citic Bank internationalization.　　If rely on the development of Citic Bank itself, spontaneous to form a set of international system, spontaneous training a group of international talent, will need to spend a lot of time and energy. Finally, through the integration of Citic Bank and Citic China Gold, will reduce the operating costs and overall management costs of Citic Bank and Citic. For example, in the area of risk control, Citic Bank and Ka Wah Bank are currently in the concept of risk control, system and operation management system are relatively independent, after the completion of the transaction, the two sides in the risk management policy, Cross-border customer audit process, credit management and other aspects of the integration will be more effective, will produce greater synergy, Reduce overall management costs.　　In the construction of IT system, after the merger of the two banks, we can draw on it's advanced technology, share intellectual property, and achieve the cost-saving goal while sharing the technology facilities construction. Through this acquisition, Citic Bank will also occupy a favorable market competitive position once Hong Kong becomes the renminbi Cross-border Settlement Center in the future. Some of the current institutional and policy changes make it possible for Hong Kong to be in a favourable position in the forthcoming Renminbi Cross-border settlement service.　　In this context, Citic Bank to enter the Hong Kong market through the acquisition of Citic China, will also make Citic Bank in the renminbi Cross-border settlement business in the field of a very favorable competitive position. And the market is more familiar with BBVA's cooperation with CITIC Bank. As a strategic investor of CITIC Bank, Citic Bank's ability to serve cross-border customers in Europe and Latin America has been expanded after BBVA took a stake in Citic Bank. Citic Bank and BBVA further promoted strategic cooperation in the areas of corporate banking, investment banking, international business, capital and capital market operations, private banking, risk management and talent exchange in 2008.　　The two sides met regularly through the Strategic Cooperation Committee, maintaining a smooth communication mechanism and advancing cooperation in various fields. Corporate banking, both sides accelerated the pace of automobile finance and annuity business cooperation, in product design, marketing tools, risk management, system planning and other aspects of deepened cooperation; investment banking business, both sides actively promote project financing, cross-border mergers and acquisitions and other aspects of cooperation; international business, the two sides share the agency network, Recommend customers and marketing to each other; At the same time, in the settlement business, trade financing, security loans, export credit, the Spanish government loans, liquidation business and other areas of active cooperation; risk management, BBVA participated in the CITIC Bank's debt rating and default risk exposure measurement project, retail rating project bidding work,　　Provide relevant technical support to actual project development.　　Chen Xiaoxian said that the cooperation between CITIC Bank and BBVA is very deep and pleasant, and since the cooperation between the two sides is based on a thoughtful basis, the future cooperation between the two sides will also be very pleasant. At the same time as Citic China Gold shareholders, BBVA and Citic China Gold cooperation is also commendable. Citic China Gold and BBVA's cooperation, mainly including the Treasury market and corporate banking business. Citic National Gold is the Asian Product Development center of the global distribution business of BBVA, as well as the distribution centers of Asian customers in various local and global products in the region. In addition, Citic Capital also has good cooperation with BBVA.　　Citic Capital's mutual fund, which was launched in Spain at the end of 2007 in partnership with BBVA, will continue to develop and launch new products when the market environment improves. Citic National Gold 2008 interim report has been publicly disclosed, Citic China Gold has been determined to implement the transformation into a regional Chinese banking group and CITIC Commercial Bank business to explore the Asian area strategy. Ka Wah Bank will become an independent banking platform for CITIC Bank and BBVA to expand their new business in Asia. After the privatization of Citic National Gold, its tripartite business model with CITIC Bank and BBVA will be built into a unique alliance with a huge competitive advantage in the region, and will help Citic Ka Wah to become a regional financial solution provider with a foothold in Hong Kong, serving the mainland, Hong Kong and other regional enterprises, Make Citic China gold clear positioning as a customer of Asia's preferred Chinese banks.