NZ's China Construction Bank makes profits soar

Jenny Shipley is among the bank's local directors.
Jenny Shipley is among the bank's local directors.
China Construction Bank's New Zealand subsidiary almost tripled its net interest income last year and recorded a five-fold increase in profit by adding commercial and retail customers, and lending to the infrastructure, energy and resources sectors.

Last year, China's second-largest lender opened a local branch, becoming the first overseas bank approved under the Reserve Bank's dual-registration rules, in addition to its subsidiary China Construction Bank (New Zealand) which registered on January 30, 2014. Its local directors include former prime minister Jenny Shipley and professional directors John Shewin and Michael Allen.

The subsidiary's disclosure statement shows net interest income jumped to $24.5million in calendar 2017 from $8.8million a year earlier, and up from $1.4million in the 11 months of its inaugural year 2014. Profit jumped to $10.4million from $1.8million. Its provision for impairments on loans rose to $1.6million last year from $745,000 in 2016.

The bank's residential mortgage book jumped 93% to about $735million and its corporate loans soared 151% to $913million. Total gross loans and advances rose to $1.65billion from $745million. While it remains a minnow compared with the big four Australian-owned banks in New Zealand (ANZ Bank's gross loans were about $126billion at the end of 2017), if its rate of growth continues it is potentially snapping at the heels of the smallest of the "big nine" - the Co-operative Bank, whose gross loans were $2.27billion, according to KPMG's quarterly survey.

"China Construction Bank has made significant progress in the last 3.5 years in building its client business" in New Zealand, Jun Qi, the New Zealand unit's chief executive said.

Mr Qi said the aim for 2018 was "to continue to grow on our success".

Its corporate and institutional banking team has made inroads into the infrastructure, energy and resources sectors in New Zealand. In addition, it had provided corporate financing for three of New Zealand's primary international airports and ports, and to several NZX-listed energy and property sector companies, the lender said.

Add a Comment






Our journalists are your neighbours

We are the South's eyes and ears in crucial council meetings, at court hearings, on the sidelines of sporting events and on the frontline of breaking news.

As our region faces uncharted waters in the wake of a global pandemic, Otago Daily Times continues to bring you local stories that matter.

We employ local journalists and photographers to tell your stories, as other outlets cut local coverage in favour of stories told out of Auckland, Wellington and Christchurch.

You can help us continue to bring you local news you can trust by becoming a supporter.

Become a Supporter