Industrial and Commercial Bank of China

Last updated on 14 November 2017

Industrial and Commercial Bank of China Limited (ICBC; simplified Chinese: 中国工商银行; traditional Chinese: 中國工商銀行; pinyin: Zhōngguó Gōngshāng Yínháng, more commonly just 工行 Gōngháng) is a Chinese multinational banking company, it is the largest bank[2] in the world by total assets and the most valuable bank in the world by market capitalization since February 2017.[3][4] It is one of China's "Big Four" state-owned commercial banks (the other three being the Bank of China, Agricultural Bank of China, and China Construction Bank). It was founded as a limited company on January 1, 1984. As of June 2015, it had assets worth US$3.616 trillion.[5] Generally considered the largest bank and public company in the world by assets;[6][7][8] it is the first Chinese bank to achieve such a feat.[9][10][11] It ranks number 1 in The Banker's Top 1000 World Banks ranking, and first on the Forbes Global 2000 list of the world's biggest public companies.[12]

Industrial and Commercial Bank of China Limited
Public company
Traded as
ISIN CNE1000003G1
Industry Banking
Financial services
Investment services
Founded Beijing, China
(1984)
Headquarters Beijing, China
Key people
Yi Huiman
(Chairman & Executive Director)
Luo Xi (Vice president)
Products Finance and insurance
Consumer banking
Corporate banking
Investment banking
Investment management
Global wealth management
Private equity
Mortgage loans
Credit cards
Revenue Increase CN¥668.733 billion (2015)
Profit Increase CN¥277.131 billion (2015)
Total assets Increase CN¥22.210 trillion (2015)
Total equity Increase CN¥1.789 trillion (2015)
Owner
Number of employees
Increase 466,346 (2015)
Capital ratio Increase 12.87% (CET1)
Website icbc.com.cn
Footnotes / references
in a consolidated basis, excluding minority interests[1]
Industrial and Commercial Bank of China Limited
Simplified Chinese 中国工商银行股份有限公司
Literal meaning Industrial and Commercial Bank of China, Company Limited by Shares
Transcriptions
Industrial and Commercial Bank of China
Simplified Chinese 中国工商银行
Traditional Chinese 中國工商銀行
Transcriptions
Standard Mandarin
Hanyu Pinyin Zhōngguó Gōngshāng Yínháng
Second alternative Chinese name
Chinese 工行
Transcriptions
Standard Mandarin
Hanyu Pinyin Gōngháng

History

1984

Industrial and Commercial Bank of China (ICBC) opened its very first office branch on 1 January 1984 in Beijing as a local state-run bank.

1999

ICBC opened a branch in Luxembourg which became the European headquarters of the bank in 2011.[13] ICBC (Europe) S.A. operates a network covering branches in major European cities, namely Paris, Amsterdam, Brussels, Milan, Madrid, Barcelona, Warsaw and Lisbon.[14]

2005

The bank's Hong Kong operations are listed under the name ICBC Asia. It has purchased the Hong Kong subsidiary of Fortis Bank and rebranded it under its own name on 10 October 2005.

2006

In the runup to its planned initial public offering, on 28 April 2006, three "strategic investors" injected US$3.7 billion into ICBC :

World's largest IPO (at the time)

ICBC Tianjin.JPG
ICBC Bank in Beijing
VM 5492 Xian - Industrial and Commercial Bank of China.jpg
The ICBC building in Xi'an
ICBC Tower from Bund.jpg
The ICBC building in Shanghai
ICBC Tokyo Branch.jpg
The ICBC building in Tokyo
ICBCCanada350Hwy7.jpg
ICBC Canada
Torre Madero Office desde D%C3%A1rsena Norte.JPG
Torre Madero Office, the current ICBC headquarters in Buenos Aires

ICBC was simultaneously listed on both the Hong Kong Stock Exchange and Shanghai Stock Exchange on 27 October 2006. It was the world's largest IPO at that time valued at US$21.9 billion, surpassing the previous record US$18.4 billion IPO by Japan's NTT DoCoMo in 1998.[17] In 2010, Agricultural Bank of China broke ICBC's IPO record when it raised $22.1 billion. China's largest commercial bank was also the first company to debut simultaneously on both the Hong Kong and Shanghai stock exchanges.

ICBC raised at least US$14 billion in Hong Kong (H-shares) and another US$5.1 billion in Shanghai (A-shares). Due to heavy subscriptions, the greenshoe (i.e. over-allotment) placements were exercised and ICBC's take rose to US$21.9 billion (17% of ICBC's market value before the IPO), divided in US$16 billion in Hong Kong and US$5.9 billion in Shanghai. Following the global offering, the free float of shares was 22.14% of the market capitalization.

At the end of its first day of trading, the bank's shares closed up almost 15% at HK$3.52 in Hong Kong, compared with the listing price of HK$3.07, which was set at the top of the indicative range due to the strong demand. According to Bloomberg, ICBC's market capitalisation at the end of trade based on its Hong Kong shares was US$156.3 billion, making its equity the world's fifth highest among banks, just behind JPMorgan Chase. Meanwhile, ICBC's Shanghai-listed A-shares recorded more modest gains and ended up 5.1% from the offering price of RMB 3.12.

2008

In August 2008, ICBC became the second Chinese bank since 1991 to gain federal approval to establish a branch in New York City.[18]

At the 2008 ALB China Law Awards, ICBC was crowned:

  • In-House of the Year - Banking & Financial Services In-House Team of the Year
  • In-House of the Year - China In-House Team of the Year

2010

In 2010, ICBC loaned $400 million towards the completion of the Gibe III dam in Ethiopia. Groups that oppose the dam such as International Rivers and Survival International have complained about or have written to ICBC against the dam's funding.[19][20]

2011

On January 24, 2011, ICBC opened a branch office in Madrid, Spain.[21]

On 20 May 2011, Industrial and Commercial Bank of China Ltd. established two branches in Pakistan, one in Karachi, the other in Islamabad. On 18 August 2011, ICBC passed the examination from State Bank of Pakistan and started its business in Pakistan.

2012

2012 In November, ICBC acquired for $600 million 80% stake of Standard Bank Argentina and, six months later, the change was made in the 103 branches that the South American bank had in the country. It is the largest operation of a Chinese bank in Latin America. In Argentina, the bank has 1,000,000 individual customers, 30,000 companies of all categories and over 1600 corporate companies.

2013

During the 2013 Korean crisis, the Industrial and Commercial Bank of China halted business with a North Korean bank accused by the United States of financing Pyongyang's missile and nuclear programs.[22]

It was announced at the end of July 2013 that South Africa’s Standard Bank was in talks to sell its markets business in London to the Industrial and Commercial Bank of China for more than $500 million.[23]

2014

On September 24, 2014, ICBC Kuwait Branch officially opened in Kuwait City, capital of Kuwait. As the first and currently the only Chinese bank in Kuwait, the establishment of ICBC Kuwait Branch ended the history of no Chinese bank’s presence in Kuwait. Meanwhile, it is also the fourth branch of ICBC in the Middle East, following branches in Dubai, Abu Dhabi and Doha. Kuwaiti Deputy Prime Minister and Minister of Commerce and Industry Abdulmohsen Al-Madaj, Chairman of ICBC Jiang Jianqing, and China’s ambassador to Kuwait Cui Jianchun and other officials and guests attended the opening ceremony held in Kuwait City on September 24.

ICBC is not only the first Chinese bank to set up operating branches in the Middle East, but also the biggest Chinese bank in the region in terms of total number of branches and business scale. The establishment of ICBC Kuwait Branch has further optimized the Bank’s service network in the Middle East and represents another important achievement of the Bank’s international operation strategy. ICBC Kuwait Branch has full-suite banking license, offering high-quality financial products and diversified and comprehensive financial services tailored to customers’ needs. Meanwhile, it will continue cooperating with other ICBC institutions in the Middle East to upgrade its comprehensive service capability in Kuwait.

As discussed by ICBC Senior Officials, the bank is open to alternative banking and financing and would like to seek more guidance on best practices.[24]

2014 was an outstanding year for ICBC, ranking 1st in the Top 1000 World Banks,[11] based on tier 1 capital, and also being recognised as The Banker's Global Bank of the Year.[25]

2015

On May 25, 2015, the Company further strengthened its presence in the Middle East and Europe by purchasing[26] Turkey's TekstilBank and forming its ICBC Turkey subsidiary.

2016

On February 17, 2016, the Spanish Guardia Civil raided the offices of ICBC in Madrid, Spain, investigating suspicions of money laundering.[21]

On November 18, 2016, the bank obtained a license to take deposits in Russia.

ICBC Financial Services, the bank’s brokerage unit, provided about $88 billion of repo financing at the end of 2015, up from $59 billion two years ago, according to regulatory filings. The figures are before netting agreements that can be used to reduce overall assets and liabilities. Almost all the repo financing that ICBC provides is on U.S. government bonds.[27]

2017

ICBC launched robo-advisor service to its wealth-management operations.[28][29]

In October 2017, the Bank reported a 3.3 percent rise in its net profit for the third quarter.[30]

Basic figures

As of 2006, ICBC has 2.5 million corporate customers and 150 million individual customers.[31] In 2005, net profit was up 12.4% to RMB 33.7 billion, and the total loan balance was RMB 3,289.5 billion. Total liabilities are RMB 6,196.2 billion, up 11.2%. Delinquent or non-performing loans (NPL) total RMB 154.4 billion, a significant reduction although the figures are widely regarded as being somewhat higher than officially stated. It has an NPL ratio of 4.69% and a capital adequacy ratio of 9.89%.

As of December 2, 2014, ICBC is ranked the largest bank in the world by assets and by tier 1 capital.[32] In July 2007 it was ranked 30th in the world in terms of revenue.[33]

Loans by industry

In millions of Chinese RMB (Yuan) in 2005:

  • Manufacturing: 662,376, 20.1% (28.7% in 2004)
  • Transportation, storage, postage & telecommunications: 367,371, 11.2% (10.2% in 2004)
  • Power, gas and water: 281,179, 8.6% (7.0% in 2004)
  • Retail and wholesale, catering: 265,906, 8.1% (6.9% in 2004)
  • Property development: 194,024, 5.9%, (5.6% in 2004)
  • Social service organization: 103,070, 3.1%, (3.2% in 2004)
  • Construction: 89,666, 2.7%, (2.1% in 2004)
  • Other industries: 313,804, 9.5%, (12.1% in 2004)
  • Discounted bills: 392,717, 11.9%, (8.4% in 2004)
  • Personal loans: 515,042, 15.7%, (13.1% in 2004)
  • Overseas business:104,398, 3.2%, (2.7% in 2004)

Total: 3,289,553

Loan collateral

  • Secured by mortgages: 34.1%
  • Secured by other collateral: 22.1%
  • Guaranteed loans: 23.3%
  • Unsecured loans: 20.5%

Non-performing loans

At the end of 2004, 19.1% of ICBC's portfolio consisted of non-performing loans.[34] In order to clean up ICBC's balance sheet and prepare it for overseas listing, the Chinese government orchestrated a series of capital injections, asset transfers, and government-subsidised bad loan disposals that eventually cost more than US$162 billion.[35] This included an approval for a cash injection of US$15 billion (financed from China's massive foreign exchange reserves) on 28 April 2005.[36] The Beijing-based state company, China Huarong Asset Management, helped ICBC dispose of its bad loans. As the 2005 annual report records, just under 5% of loans are classified as non-performing, in comparison with the majority of western banks who have lower NPL ratios (US commercial banks around 1%).[37]

Environmental policy and record

In 2008 ICBC was the first Chinese Bank to adopt the Equator Principles, an international set of social and environmental standards for financial institutions launched in 2003.[38] It has also adopted the Green Credit Policy launched in 2007 by the Chinese Ministry of Environmental Protection.[39] International environmental groups have criticized ICBC for failing to adhere to its social environmental standards and of being hypocritical, because ICBC is involved in the financing of the controversial Gilgel Gibe III Dam in Ethiopia.[38]

Subsidiaries

International

Awards

  • Best Banking Performer, China in 2016 by Global Brands Magazine Award.[40]
  • Global 2000 Rank #1 - World's Largest Public Companies in 2016 [41]

See also

References

  1. ^ "2015 Annual Report" (PDF). Industrial and Commercial Bank of China. 22 April 2016. Retrieved 28 January 2017.
  2. ^ "ICBC overtakes Wells Fargo as world's most valuable bank brand". South China Morning Post. Retrieved 2017-04-05.
  3. ^ Laura J. Keller and Katherine Chiglinsky (September 13, 2016). "Wells Fargo Eclipsed by JPMorgan as World's Most Valuable Bank". Bloomberg L.P. Retrieved January 27, 2017.
  4. ^ Maxfield, John (8 February 2017). "A Foolish Take: The World's Most Valuable Bank Brand … Is Now In China -- The Motley Fool". The Motley Fool.
  5. ^ "Top Banks in the World 2015". Banks around the World. 2016-04-22.
  6. ^ "ICBC". Forbes. Retrieved April 19, 2013.
  7. ^ "The World's Biggest Public Companies". Forbes. Retrieved June 6, 2011.
  8. ^ "Top 1000 World Banks 2013". The Banker. Retrieved July 1, 2013.
  9. ^ "Chinese bank tops global 1,000 ranking for first time". BBC. 1 July 2013. Retrieved July 1, 2013.
  10. ^ "Bigger big banks". The Economist. 30 June 2014. Retrieved July 17, 2014.
  11. ^ a b "Top 1000 World Banks 2014". The Banker. 30 June 2014. Retrieved July 17, 2014.
  12. ^ "The World's Biggest Public Companies List - Forbes". Retrieved 2016-11-06.
  13. ^ http://usa.chinadaily.com.cn/epaper/2014-03/17/content_17352711.htm
  14. ^ "ICBC's Five Branches in Europe Start Operation-ICBC NEWS-ICBC China". Retrieved 11 January 2017.
  15. ^ "A dragon stirs". The Economist. 12 October 2006.
  16. ^ a b "Archived copy". Archived from the original on 2007-09-29. Retrieved 2006-12-03.
  17. ^ http://edition.cnn.com/2006/BUSINESS/09/27/china.icbc.reut/index.html. Missing or empty |title= (help)
  18. ^ Order Approving Establishment of a Branch-Industrial and Commercial Bank of China Limited
  19. ^ China's largest bank to fund devastating Ethiopian dam, Survival International
  20. ^ China's Biggest Bank to Support Africa's Most Destructive Dam, International Rivers
  21. ^ a b "Spain's Civil Guard Launches Money Laundering Operation Against China's ICBC In Madrid". Retrieved 11 January 2017.
  22. ^ "More Chinese banks stop transactions with N.Korea - Mubasher". English.mubasher.info. 2013-05-11. Retrieved 2013-05-18.
  23. ^ Standard Bank to sell London business to ICBC for over $500 mln, International: Reuters, 31 July 2013
  24. ^ ICBC Sets up Kuwait Branch, International: www.icbc.com, 22 October 2014, archived from the original on 28 October 2014
  25. ^ "Bank of the Year Awards 2014 – global and regional winners". The Banker. 28 November 2014. Retrieved 13 March 2015.
  26. ^ "ICBC becomes active in Turkey". Hurriyet Daily News. 25 May 2015.
  27. ^ Using Chinese Money, a Hedge-Fund Startup Bets Big in Treasuries, www.bloomberg.com, 22 August 2016
  28. ^ "ICBC launches robo-adviser service for wealth-management products". South China Morning Post. Retrieved 2017-11-14.
  29. ^ "ICBC Begins Robo Wealth Management". finews.asia. Retrieved 2017-11-14.
  30. ^ "UPDATE 1-China's top bank ICBC Q3 profit rises 3.3 pct, above estimates". Reuters. 2017. Retrieved 2017-11-14.
  31. ^ http://www.chinadaily.com.cn/china/2006-09/27/content_698025.htm.
  32. ^ http://www.thebanker.com/cp/20/T1000_25_Tier1&TotalAssets.gif
  33. ^ "HITC Business - News". Retrieved 11 January 2017.
  34. ^ "Archived copy". Archived from the original on 2006-10-21. Retrieved 2006-10-30.
  35. ^ Mitchell, Tom (28 October 2006). "ICBC surges on completion of IPO". Retrieved 11 January 2017 – via Financial Times.
  36. ^ MarketWatch. "China approves $15B bank injection". Retrieved 11 January 2017.
  37. ^ "Archived copy" (PDF). Archived from the original (PDF) on 2007-10-07. Retrieved 2006-12-03.
  38. ^ a b "Ethiopia Dam Blot on China's Aid Record". South China Morning Post, Hong Kong. 7 June 2010. Retrieved 2 September 2012.
  39. ^ Motoko Aizawa, Sustainability Advisor, International Finance Corporation. "China s Green Credit Policy" (PDF). pp. 24 February 2011. Retrieved 2 September 2012.
  40. ^ "AWARD WINNERS 2016 - Global Brands Magazine". Retrieved 11 January 2017.
  41. ^ Schaefer, Steve. "Industrial and Commercial Bank of China - pg.2". Forbes. Retrieved 2016-11-14.

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