Ma Yuhua, President Of China Merchants Bank: The Two Spanformation Is Driven By Force.

"Birds in cages, Guan Yu can not Zhang Fei; in human life, eight quit also need Wukong." A chance chance made this old couplet with silence and dust become a modern one. enterprise The motto.

By the end of last year, China Merchants Bank President Ma Yuhua recommended this couplet to Fujian on the way to business. staff 。 Now, this ingenious inlay alliance is promoting the spanformation of China Merchants Bank, which is called the two spanformation.

According to the interim results released by China Merchants Bank in 2010, the net profit growth rate exceeded the 28 percentage points of the domestic banking industry. In response, Ma Yuhua comforting comments: This shows that the two spanformation path of China Merchants Bank is on track.

　　 Why spanformation?

The snake mouth in midsummer is too hot to bear. Apart from the famous "time is money, efficiency is life", a heated brainstorming is being staged at the recruitment training center near the placard.

This is the annual Central Bank branch governor's meeting of China Merchants Bank. The participants are the governor of all branches of the China Merchants Bank, and the head of the head office and the heads of departments. The theme of this year's meeting is the two spanformation. The branch leaders were asked to introduce two questions and a bright spot in their branch offices in their respective 5 minutes' speeches. "We must hit the nail on the head when we talk about problems. Ma Yuhua said.

This form of direct meeting is a reflection of the sense of urgency and urgency of the present and may be the driving force for the second spanformation.

　　 About 6 years ago, China Merchants Bank proposed the adjustment of its business strategy, that is, the first spanformation. What's the result?

Ma Yuhua: five or six years ago, the domestic banking industry had a strong convergence in the profit model. On the type of business, wholesale business accounted for more than 90%, and retail business was very few. In terms of customer structure, it was large enterprises, "big money", no one attached importance to small and medium-sized enterprises, and income structure was all spread income, and there was almost no middle income. We have studied western banks seriously, and think that this will not last for long, so we are determined to undertake the first spanformation.

The direction of the spanformation is very clear: first, the development of retail business, then the goal is to make up 30% of the total assets; second, develop new wholesale businesses, including cash management, enterprise annuity, asset trusteeship, investment banks, and so on, while improving the proportion of SMEs in the wholesale business; and third, increase the proportion of non interest income in the whole income.

After five or six years of efforts, by the end of last year, China Merchants Bank's retail loans accounted for more than 30% of the proportion of self financing loans. SME loans accounted for 50% of the proportion of public loans, and the contribution of non interest income to net operating income also exceeded 20%.

What is worth mentioning is that, from the end of 2003 to the end of 2008, the net profit of China Merchants Bank has increased by 57.4% over the past five years, the net assets earning rate has reached 20.2% annually, and the non-performing loan rate has continued to decline from 3.15% to 1.14%, and the reserve coverage rate has continued to rise from 97.39% to 223.29%. Especially in the most severe 2008 of the financial crisis, not only in China, but also internationally. The first spanformation is expected to achieve the desired results.

　 The first spanformation has found a way of rapid development for China Merchants Bank. Why is it going to be spanformed again?

Ma Yuhua: first of all, because the world is flat, and our development experience has been widely copied in the industry, the blue ocean has long been blue. Secondly, it is also a more direct reason. Since the global financial crisis, because of its unique asset liability structure (demand deposits account for relatively high), China Merchants Bank is facing more profit pressure than its peers. Meanwhile, the pressure of capital is further highlighted. {page_break}

In order to cope with the new challenges, we must speed up the new spanformation on the basis of a continuous spanformation.

Specifically, the reasons for the two spanformation are mainly three: first, in order to better adapt to the rapidly changing business environment. In recent years, great changes have taken place in the way of economic development, regulatory policy and customer demand. Commercial banks have long been pursuing narrowing the way of business which takes large enterprises as the main object of service, with wholesale loans as the main assets, the interest margin of savings and loans as the main source of profits, and the scale as the main criterion. If we want to develop, we must find new ways.

Second, in order to better promote the sustainable development of China Merchants Bank. In the past few years, the profit of the Bank of China has been increasing. The pressure of capital, credit, cost and manpower input is not so prominent. In the next few years, the profit growth of China Merchants Bank will be stable. This will make the rigid constraint of factor resources input into the future normal. In the past, extensive extensive growth mode that relies heavily on resources will not continue. Therefore, spanformation is the driving force.

Third, in order to better shape and consolidate the business characteristics of China Merchants Bank. In the long term business practice, we have deeply realized that a bank, especially small and medium-sized banks, should stand out from the crowd. The key is to form their own business characteristics and reflect differences with the same industry. Looking back on the growth process of China Merchants Bank in the past 23 years, whether it was the first to start offshore business, or the first to launch a smart card or a Netcom, whether it is to develop credit cards vigorously, or to launch golden sunflower financial management and private banking services, etc. 6 years ago, the first spanformation was made for this. The two spanformation started this year is also for this purpose.

　 Reinventing "new China Merchants Bank"

In interpreting the couplets mentioned earlier, Ma Yuhua mentioned innovation, system and culture. "Guan Yu can not be Zhang Fei" means that if we do not delegate some powers, they will be bound to their wings and have difficulty in "Zhang Fei"; and how to behave after decentralization of power? "Eight quit must also be Wukong". "Eight quit" means all kinds of necessary systems. "Wukong" can be understood as the risk culture of the merchants bank, and culture is deeply rooted in the hearts of the people, and the system can also be effectively implemented.

He hoped that the two spanformation could become a creative move for China Merchants Bank to break away from "cage" and spread its wings, and the "eight quit" and "Wukong" representing the system and culture respectively were the guarantee for the success of this innovation. Ma Yuhua hopes to realize the two spanformation in three to five years, and forge a new "China Merchants Bank" which has strong competitiveness and sustainable development both at home and abroad.

　 What goals are included in the two spanformation?

Ma Yuhua: the fundamental goal of the two spanformation of China Merchants Bank is to maximize business efficiency and ensure sustained and steady growth in profitability.

We have set specific targets for 2012: reducing capital consumption. The capital adequacy ratio of the whole bank remains above 10%, and strives to reach the level of about 12%. The two is to raise loan pricing. The pricing level of the company and retail loan has reached the average level of the domestic shareholding bank, and strive to achieve the leading level in the industry. The three is to control the financial cost. While ensuring the necessary strategic investment, the cost income ratio of the whole bank has dropped to less than 40%. The four is to increase value customers. The total number of retail customers with total assets above 500 thousand yuan is increased to more than 2%, and the total number of customers who make a total contribution of 100 thousand yuan or more than 5 million yuan should be increased to more than 9% and 0.5% respectively. The five is to ensure that risk is controllable. The upper limit of the non-performing loan ratio is 1.2%, excluding credit cards, the upper limit of the retail loan's bad rate is 0.2%, and the provision coverage rate is above 200%.

To sum up, the task of the two spanformation is to completely overturn the extensive management mode of the extensive extension of the past, such as high capital consumption, high cost investment, low price reduction and risk reduction, so as to achieve intensive intension operation so as to continuously improve the return on equity and bank value. {page_break}

　 How do we achieve these goals?

Ma Yuhua: we will focus on five measures: first, improve the performance appraisal system. We should strengthen the assessment of branch efficiency, efficiency, risk pricing and high value customer ratio, and further increase the weight of financial indicators.

The two is to strengthen the management of economic capital. Based on the principle of matching risks and profits, we should adjust the weight of some business risks, explore operational risks in the scope of economic capital management, strengthen capital assessment, appropriately raise capital return requirements and economic capital conversion coefficient.

The three is to enhance the loan pricing ability and link the pricing level of the branch with the allocation of credit and capital. Although our risk culture is deeply rooted in the hearts of the people, we do not want to sacrifice price for low risk. We should set up a culture: whose pricing power is high, and the resources will tilt to whom.

The four is to reduce costs and expenses. Pay close attention to resource integration, process spanformation, employee effectiveness and financial discipline.

Five is to improve the organization and management system. We should start the reform of the retail banking system, strengthen the integration and promotion of the whole line retail business, set up an efficient new wholesale business organization mode in the branches, and try separate accounting for the relevant business departments of the head office under the conditions.