Green Finance

In 2023, in line with the guiding principles of the 20th CPC National Congress and Xi Jinping Thought on Ecological Civilization, the Bank formulated the Development Plan for Green Finance of China CITIC Bank (2024-2026). This initiative aims to comprehensively implement the strategic objectives of "carbon peak and carbon neutrality", foster the Bank's low-carbon transition and sustainable development, and advance the strategic execution of green financial services from a strategic and comprehensive perspective. Based on a thorough understanding of the Bank's present development status and the internal and external environments, the Bank sets forth medium- to long-term development objectives for green finance. Specifically, by the end of 2026, the Bank aspires to maintain a consistent top-tier position among joint-stock banks in green finance operations. This involves realizing overarching development goals, including "substantial scale improvement, ongoing structural optimization, sustained diversification of products, a more balanced developmental trajectory, the establishment of a more comprehensive system, and the cultivation of a more influential brand".

The Bank is actively establishing standards (guidance) related to green credit examination and approval. It stays updated on the advancements and trends in emerging industries like new energy, new energy vehicles, and new materials, as well as in "high energy-consuming and high emission" industries such as steel, coal, and glass. In 2023, the Bank revised the standards (guidelines) for review and approval in three green industries—photovoltaic manufacturing, photovoltaic power generation, and new energy vehicles—to align with the latest industry developments. As of the end of 2023, 12 green industry review and approval standards (guidelines) have been formulated.

To better serve the green sector and facilitate the green and low-carbon transition of the economy and society, the Bank introduced a distinctive Green Finance Service Plan in 2023, aiming to establish a comprehensive financial service system that supports the enduring value circulation of green finance. The system can be represented as an evergreen tree in which the "roots" are the development strategy, the "trunk" is the service mode, the "branches" are the service system, and the "leaves" are the product matrix. The Bank continuously expands the green finance ecosystem and increases the resource allocation for green development and low-carbon transition to support sustainable growth of green enterprises, green industries, and green ecology.

The Bank rigorously adheres to national goals of reaching peak carbon emissions and carbon neutrality. It formulates green finance credit policies to clearly delineate the trajectory of the Bank's green finance business development. By actively endorsing credit allocations that resonate with green development trends, the Bank consistently increases its share of green business. As of the end of 2023, the balance of the Bank's green loans totaled 459.022 billion yuan, an increase of 37.40% compared to the end of the previous year, with a growth rate surpassing that of all other loans offered by the Bank.

The Bank plays an active role in the green bond market, extensively promoting the issuance, underwriting, and investment of various green and low-carbon themed bonds. These efforts aim to support the robust growth of the green bond business and promote the comprehensive green transformation of the economy and society.

In 2023, the Bank issued two tranches of green financial bonds totaling 20 billion yuan in the China Interbank Bond Market (CIBM). The funds raised were allocated to green industry projects outlined in the Green Bond Endorsed Projects Catalogue (2021 Edition). In 2023, the Bank underwrote a total of 22 green bonds, amounting to 10.31 billion yuan, including 1.55 billion yuan for carbon-neutral bonds and 1.05 billion yuan for sustainability-linked bonds. The Bank underwrote the first-ever sustainability-linked panda bond in the entire market. As of the end of 2023, the Bank's balance of investments in green bonds reached 16.867 billion yuan, surging 57.99% compared to the end of the previous year. These investments covered a wide array of green bonds, including green asset-backed securities, green financial bonds, green corporate bonds, green short-term financing bonds, and green government bonds. As a key market maker in the CIBM, the Bank proactively provides both bilateral and quote-request services for green and sustainability bonds, aiming to furnish market participants with pricing benchmarks and liquidity support for green bonds. In 2023, the cumulative turnover of green bonds reached 43.127 billion yuan, representing a year-on-year growth of 8.74%. As a leading market-maker for green bonds in the CIBM, the Bank is one of the first institutions to provide quotes for innovative bond portfolio products. In 2023, the Bank introduced the "China CITIC Bank Green Credit Bond Basket" and partnered with the China Foreign Exchange Trade System (CFETS) to establish the "Common Ground Taxonomy (CGT) High-level Green Bond Basket," to facilitate diversified investment and trading needs of investors while enhancing bond allocation and trading efficiency.

CITIC Financial Leasing, a subsidiary of the Bank, maintains its strategic positioning as a major player in green leasing, incorporates support for the green industry into its strategic planning, and specifies the development objectives, specific sectors, and customer positioning for green leasing. Based on customer classification management, the Company applies differentiated credit policies to customers of different types, accompanying these with marketing guidelines and access standards for segmented industries such as photovoltaics, wind power, waste-to-energy, and environmental protection, and channeling its business resources towards strategic emerging industries and low-carbon, circular, and clean sectors. In 2023, CITIC Financial Leasing provided 15.73 billion yuan in green financing leasing, primarily for photovoltaic power generation, new energy logistics vehicles, new energy battery manufacturing, environmental improvement, etc. As of the end of 2023, the balance of green financial leasing amounted to 27.95 billion yuan, accounting for 57.81% of the Company's total financial leasing balance.

The Bank advocates and encourages green consumption, continuously strengthening financial support in the green consumption sector and promoting the upgrade of green consumption across society. In response to the national call to increase support for new energy vehicles, the Bank is actively advancing resource allocation and service innovation in this area. It actively joins hands with mainstream new energy vehicle brands in the market, and has established cooperative relationships with 15 pure new energy vehicle brands such as GAC Aion and Xiaopeng Motors. The Bank responds to national requirements to reduce the down payment ratio for auto loans to improve access to financial services for new energy vehicles. Furthermore, it continuously enhances product service capabilities, and has established a standardized, multi-mode, and direct system connection framework to fully align with the directly-operated, online, and digital operation models of new energy vehicle brands. In 2023, the Bank's new energy vehicle loans amounted to 8.687 billion yuan.

The Bank fully capitalized on its product design expertise and proactively promotes the concept of green and low-carbon development to customers through innovation in financial products. In 2023, the Bank issued a total of 191 structured deposits linked to green financial bonds, raising a cumulative amount of 108.385 billion yuan, effectively boosting trading activity in the green bond market.

With its own resources in green products and services, the Bank has created a one-stop value-added service model of "Green Technology + Green Consulting + Green Finance" by leveraging the carbon trading license and consulting expertise of its subsidiary CIAM Carbon Assets Management Ltd., providing customers with diversified services such as emission assessments and report preparation for green loans, calculation of carbon emissions and carbon footprint, dual-carbon planning, green technology application and promotion, carbon asset assessment and development, and matchmaking for carbon asset transactions both at home and abroad.