Agro-related financial business is the Bank's traditional business. After several years of reform and development, the Bank has accumulated fund, network, profession and brand advantages in the field of agro- related business. It has established a multi-layer and far-reaching agro-related financial service system and formed a unique market pattern where operations in urban and rural areas are linked with each other and managed on a consolidated basis.
In 2008, the Bank devised the agro-related and county "blue ocean market" development strategy. It also developed the long and medium-term agro-related business development plan and the agro-related service implementation plan. The agro-related financial department reform test project and agro-related financial service plans in counties of different types was also introduced. The Bank also clarified the objectives, areas, measures and steps of the Bank's services for agriculture, rural areas and farmers.
Development of Agro-related Financial Business
The Bank studied the State's policies and measures on the stimulation of domestic demand, the industrial structure adjustment and growth promotion. We tracked major investments arrangements in construction projects for agriculture and rural areas made by the central and local governments, and supported a number of infrastructure projects such as farmland, water conservancy, water supply, electricity, gas, road, telecommunication and clean energy. The Bank also gave support to selected small and medium-sized enterprises in counties to cultivate county key industries. According to the post-disaster reconstruction plan, the Bank increased the credit limits and actively provided financial support in the disaster-hit areas for the recovery of housing, infrastructure and enterprises. In 2008, the Bank granted agro-related loans of RMB766,700 million, increasing the balance to RMB933,000 million by the end of the year. Of all the loans, RMB998,000 million was granted to 802,717 farmers, RMB630,400 million was granted to 30,876 rural enterprises and organizations, and RMB202,800 million was granted to 1,998 urban enterprises and organizations.
By accurately identifying the market position of agro-related business, the Bank explored high-end agro- related customers owning esteemed or well-established businesses and regulated management with an aim to improving their professionalism and level of production intensity. With a focus on leading agricultural industrialization enterprises and rural economic cooperative organizations, the Bank actively supported the agricultural modernization, and made enormous efforts to fund the State's top 1,000 towns for their urbanization. Through supporting construction and development projects of road, water, electricity, gas, heating, housing as well as their circulation markets, the Bank played a crucial role in agricultural finance. During 2006-2008, the Bank's loans to state-level leading industrialization enterprises grew by an average of 22.61% annually. Among 892 of those enterprises, 592 have business relationship with the Bank, accounting for 66.37% of total; 376 have outstanding loans, with a balance of RMB37,279 million, accounting for 42.15%. Also 341 enterprises chose the Bank to be their main account bank, accounting for 38.22%. During the three-year period, the average annual growth of the Bank's loans to rural urbanization exceeded 12%.
The Bank paid great attention to the development and popularization of foreign exchange business at county- level and maintained a leading position in this regard. It has established a border trade financial service system, providing border trade settlement, bankcard, e-banking and trade finance. It also has recorded a border trade settlement volume of USD6,988 million for 2008, a year-on-year increase of 15%.
To meet the requirements on the diversified financial service needs of agro-related customers, the Bank, through the issuance of Farmer's Benefit cards and providing of micro-finance to farmers, created a unique multi-level, cost-effective and extensively-reached agro-related financial product line. The Bank started the research and development of various products, with loans for chemical fertilizer reserve in the off season as an example, registered the trademark of "Green Home Loan", created the brand "Jin-Yi-Nong"("Benefiting the Farmers"), and further implemented the agro-related financial service brand family. Moreover, the Bank also launched a series of distinctive products and services such as "Company + Farmers" guaranteed loans, working capital loans for farmer's specialized cooperatives, seasonal loans for leading agricultural enterprises, "Six- Party Cooperation + Insurance" loans, and cross-guaranteed farmer loans. Kins Payment Express and Farmers' Insurance Express services were also created.
In April 2008, the Bank launched the Farmer's Benefit Kins Card, which benefited a large number of farmers.
The card combines the functions of self-service loans, revolving loans, fund remittance, fee payment agency service and agro-related subsidy payment. By the end of 2008, the Bank had issued 8.1 million Farmer's Benefit cards, 96% of which were activated, with outstanding credits of RMB6,590 million and outstanding loans of RMB4,660 million, 292,000 card holders were provided with credit lines. In October 2008, Farmer's Benefit card telephone banking was available in 16 provincial branches. Following the Farmer's Benefit debit card, the Bank also developed and launched Farmer?s Benefit credit card which was designed for high-end customers, such as farm produce wholesalers, individually-owned businesses, small-sized processing, transportation and distribution businesses, and planters and breeders, to meet their needs for temporary, small-value and frequent working capital.
On 18 August, 2008, two rural banks set up by the Bank went into operation simultaneously in Hubei and Inner Mongolia, making the Bank the first ever domestic large-sized commercial bank to established such banks. These bank establishments will help further improve the rural financial environment, enhance the provision of rural financial services and at the same time create a new agro-related service platform for the Bank.