Zhang Enzhao

President, China Construction Bank

Nationality: Chinese.

Born: December 1946, in Juxian, China.

Education: Graduated from Fudan University.

Career: China Construction Bank, 1964–1984, various positions; China Investment Bank, 1984–1985, deputy general manager; China Construction Bank, 1986–1987, deputy general manager; 1987–1999, general manager; 1999–2000, deputy president; 2000–2002, first deputy president; 2002–, president.

Address: China Construction Bank, 25 Finance Street, Beijing, 100032, China; http://www.ccb.cn/portal/en/home/index.jsp.

■ Zhang Enzhao was the president of China Construction Bank (CCB), one of China's four large state-owned commercial banks and, at the same time, the chairman of China International Capital Corporation, the secretary of China Cinda Asset Management Company, and the deputy president of the China Banks Association. By the time he became president, Zhang had worked in the banking industry for over 40 years and had used his extensive experience in management and the financial sector to transform CCB into a modern bank capable of competing on the international banking scene.


Zhang was born in December of 1946 in Juxian, Shandong Province, China. He earned a degree in financial management from Fudan University and then began his career at CCB in 1964. CCB is a state-owned bank founded in 1954 to manage investments for large construction projects. In the 1970s and 1980s the bank expanded its products and services to include credit loans, household savings deposit, foreign exchange services, credit cards, and home mortgage financing. In the early 21st century the bank focused on medium- and long-term lending.

In 1984 Zhang spent a brief period as the deputy general manager of China Investment Bank in Shanghai. In 1986 he returned to CBB as deputy general manager. Zhang worked his way up the ranks of CBB, becoming the first deputy president in February of 2000. In 2002 the president of CBB, Wang Xuebing, was removed from office because he was being investigated by Chinese authorities, as well as the U.S. Treasury Department, for financial scandals that had occurred during his tenure at the Bank of China. In the midst of these political and financial scandals, Zhang assumed the office of president of CBB. He was responsible for guiding the bank through numerous changes at a time when the entire Chinese economy was experiencing extensive reforms.


In an attempt to branch out into global markets, China joined the World Trade Organization (WTO) in 2001, which opened China's domestic markets to foreign goods and services. As a result of this arrangement, China agreed to lift restrictions on overseas banks doing business in China by the end of 2006. This meant that China's four major banks—China Construction Bank, Bank of China, the Industrial and Commercial Bank of China, and the Agricultural Bank of China—had to quickly prepare for stiff competition from international banking rivals, such as HSBC Holdings and Citigroup. The Chinese government began pressuring these four major banks, which accounted for more than 60 percent of the country's banking assets, to restructure, attract foreign partners, sell shares, and modernize in anticipation of the changes in the banking industry that was to come from the presence of foreign banks after 2006.

Even before China jointed the WTO, CCB had been transforming its operations to become a modern commercial bank. In particular, it significantly reformed its treasury management, credit management, financial control, and accounting systems. It also introduced a new corporate identity in 1996 to reflect its new operating style. The major challenges for China's banks, including CCB, in the 21st century were to improve corporate governance structure, lower the rate of poorly performing loans, and raise capital to meet international standards.

CCB has traditionally been responsible for financing infrastructure and basic industries, such as highway, railway, telecommunication, and urban construction. Under Zhang's leadership, CCB consolidated its competitive advantage in these areas, while also increasing lending to medium- and small-sized companies with strong growth potential. Zhang also expanded financial services to information-related industries and other quickly growing sectors that have been highly profitable.


Zhang worked to effect CCB's reforms after becoming deputy president in 1999. In particular, he was a strong advocate of information technology. He encouraged the financial support of infrastructure and high-technology industries, to spark the technical development of state-owned enterprises. He also emphasized the importance of using advanced technologies within CBB, such as networking bankwide operations and improving Internet banking.

Zhang also expanded CCB's relationships with international businesses. For example, he introduced a special client manager system for multinational customers as a way to facilitate customized and favored treatment to important clients. Zhang also encouraged preferential treatment in loan policies to certain economic zones and coastal cities where multinational firms were highly concentrated. In the early 2000s CCB had 600 correspondent banks worldwide in 80 countries to serve as a bridge between China and international markets.

As leader of CCB, Zhang was an innovator who continually sought to improve business at the bank. For example, in 2003 Zhang introduced a new system of internal control mechanisms to improve risk identification and evaluation. He also proved to be a bold leader. In 2004 Zhang publicly announced that his bank would be the first state-owned commercial bank in China to be listed on the stock market. He understood the difficulties involved in transforming China's banks and was willing to commit to changing CCB's business practices accordingly.


When Zhang took over as president of CCB in 2002, the bank was doing well. In the first half of 2002 CCB reported a pretax profit of $740.9 million. Zhang was committed to continuing this success. "Our final goal is to establish a modern commercial bank with good corporate governance and sound performance that will make us a competitive heavyweight in the global financial market," Zhang told the Business Daily Update (May 13, 2002). To meet this goal, Zhang introduced a securitization plan of housing mortgage assets. Housing financing had become one of the CCB's best-selling products, as China's housing needs were quickly expanding. By 2004 CCB controlled over 70 percent of the market share in home mortgage financing.

However, in 2003 and 2004 CCB began to struggle financially. In 2004 operating profits increased 32.4 percent, but after-tax profits fell by 90 percent. Large debts were hampering the bank's reform efforts. The downturn that CCB experienced was felt by all of China's major banks. In 2004 the Chinese government chose CCB and Bank of China to participate in a pilot project to turn around their performance and make them strong enough to face international competition in 2006. The plan involved a controversial $45 billion bailout that was funded from the country's foreign exchange reserves.

In order for CCB to go public, it first had to improve its asset quality. In the beginning of 2004 CCB had about $506 million in nonperforming assets consisting of 162 mortgaged real estate projects in 58 major cities in China. Zhang courted international investors, particularly in the United States and Japan, to purchase some of these assets and ease CCB's burden. Zhang also considered a proposal to divide CCB into two separate entities before its listing on the stock market. Under this proposal, China Construction Bank Holdings Corporation was to be the parent company and China Construction Bank Company was to be the listing unit. This strategy would allow the parent company to deal with the bad load while having a financially sound listing company.

Despite the challenges of this endeavor, Zhang was an optimistic leader, and he believed that the company was succeeding in its transformation to a modern banking institution. In the China Construction Bank annual report for 2003, Zhang wrote that with careful planning, the restructuring program was well under way and headed in the right direction. However, it still was not clear whether Zhang would fulfill his promise of making CCB the first publicly listed state-owned bank in China. The Bank of China was planning to go public in 2005, and as of early 2004 Zhang not announced a date for listing CCB. "The location, size, and timetable for the listing will be decided when internal and external conditions are ripe," Zhang cautiously stated to AFX-Asia (April 27, 2004).

After 40 years as a leader in the banking industry in China, Zhang faced an enormous amount of political, public, and financial pressure to quickly modernize CCB so that it could withstand international competition. Banking reform in China was a major aspect of the country's overall economic restructuring in the early 2000s, and Zhang's legacy would depend on how well he could lead the bank during those uncertain times.

sources for further information

"CCB Vows to Cut NPL Ratio by Half," Business Daily Update , May 13, 2002.

Chan, Christine, "Big Four Can't Walk Tall as Reforms Stall," South China Morning Post , April 12, 2004.

"China Construction Bank Preparing for Public Listing," Asia Pulse , April 28, 2004.

"China Construction Bank President Dismissed, Probed over BoC Role," AFX-Asia , January 14, 2002.

"China Construction Bank Says No IPO Timetable; Mulls Second NPL Split-off," AFX-Asia , April 27, 2004.

"China's CCB Needs More Loan Provisions to Ensure IPO Success," AFX-Asia , February 25, 2004.

"Construction Bank Fulfills Year's Profit Plan in Six Months," Business Daily Update , July 23, 2002.

Pottinger, Matt, "U.S. Authorities Investigate Bank of China—Probe by Comptroller Office Coincides with Ouster of High-Profile Official," Wall Street Journal , January 14, 2002.

—Janet P. Stamatel

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