Industrial and Commercial Bank of China

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Industrial and Commercial Bank of China Ltd.
中国工商银行股份有限公司
Type Public company
SEHK1398
SSE: 601398
OTC Pink: IDCBY
Industry Banking
Financial services
Investment services
Founded Beijing, China (1984 (1984))
Headquarters Beijing, China
Key people Jiang Jianqing
(Chairman & Executive Director)
Luo Xi (Vice president)
Products Finance and insurance
Consumer Banking
Corporate Banking
Investment Banking
Investment Management
Global Wealth Management
Private Equity
Mortgages
Credit Cards
Revenue CN¥ 475.21 billion (2011)[1]
Net income CN¥ 208.44 billion (2011)[1]
Total assets CN¥ 15.476 trillion (2011)[1]
Total equity CN¥ 957.82 billion (2011)[1]
Owner(s) Chinese Government
Employees 405,354 (2011)[1]
Website (English) ICBC.com.cn
Industrial and Commercial Bank of China
Simplified Chinese 中国工商银行
Traditional Chinese 中國工商銀行
Alternative Chinese name
Chinese 工行

Industrial and Commercial Bank of China Ltd. (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 the largest bank in the world by total assets and market capitalization.[2] 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 March 2010, it had assets of RMB 12.55 trillion (US$1.9 trillion), with over 18,000 outlets including 106 overseas branches and agents globally.[3] In 2013, it ranked number 1[4] on Forbes Global 2000 list of worlds biggest public companies,[5] and number 1 in The Banker's Top 1000 World Banks ranking[6] - the first time ever for a Chinese bank.[7]

History[edit]

2005[edit]

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[edit]

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[edit]

ICBC Bank in Beijing
The ICBC building in Xi'an
The ICBC building in Shanghai
The ICBC building in Tokyo

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.[10] In 2010, AgBank 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[edit]

In August 2008, ICBC became the second Chinese bank since 1991 to gain federal approval to establish a branch in New York City.[11]

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[edit]

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.[12][13]

2013[edit]

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.[14]

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.[15]

Basic figures[edit]

As of 2006, ICBC has 2.5 million corporate customers and 150 million individual customers.[16] 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 June 29, 2009, ICBC is ranked the 17th largest bank in the world by assets and 8th in the world by tier 1 capital.[17] In July 2007 it was ranked 30th in the world in terms of revenue.[18]

Loans by industry[edit]

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[edit]

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

Non-performing loans[edit]

At the end of 2004, 19.1% of ICBC's portfolio consisted of non-performing loans.[19] 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.[20] This included an approval for a cash injection of US$15 billion (financed from China's massive foreign exchange reserves) on 28 April 2005.[21] The Beijing-based state company, China Huarong, 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%).[22]

Environmental policy and record[edit]

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.[23] It has also adopted the Green Credit Policy launched in 2007 by the Chinese Ministry of Environmental Protection.[24] 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.[23]

See also[edit]

References[edit]

  1. ^ a b c d e Financial Statements for Industrial and Commercial Bank of China - Google Finance
  2. ^ ICBC tops Citigroup as world's biggest bank
  3. ^ China's biggest bank goes to market, Financial Times
  4. ^ "ICBC". Forbes. Retrieved April 19, 2013. 
  5. ^ "The World's Biggest Public Companies". Forbes. Retrieved June 6, 2011. 
  6. ^ "Top 1000 World Banks 2013". The Banker. Retrieved July 1, 2013. 
  7. ^ "Chinese bank tops global 1,000 ranking for first time". BBC. 1 July 2013. Retrieved July 1, 2013. 
  8. ^ "A dragon stirs". The Economist. 12 October 2006. 
  9. ^ a b http://www.financialservicesdistribution.com/get.asp?script=article&ID=28963
  10. ^ http://edition.cnn.com/2006/BUSINESS/09/27/china.icbc.reut/index.html.  Missing or empty |title= (help)[dead link]
  11. ^ Order Approving Establishment of a Branch-Industrial and Commercial Bank of China Limited
  12. ^ China's largest bank to fund devastating Ethiopian dam, Survival International
  13. ^ China's Biggest Bank to Support Africa's Most Destructive Dam, International Rivers
  14. ^ "More Chinese banks stop transactions with N.Korea - Mubasher". English.mubasher.info. 2013-05-11. Retrieved 2013-05-18. 
  15. ^ Standard Bank to sell London business to ICBC for over $500 mln, International: Reuters, 31 July 2013 
  16. ^ http://www.chinadaily.com.cn/china/2006-09/27/content_698025.htm.
  17. ^ http://www.thebanker.com/cp/20/T1000_25_Tier1&TotalAssets.gif
  18. ^ World's Largest Banks / Securities Firms By Revenue
  19. ^ http://www.chinaonline.com/headlines/cs-protected/C05022403.htm
  20. ^ ICBC surges on completion of IPO - FT.com
  21. ^ China approves $15B bank injection -report - MarketWatch
  22. ^ http://www.adb.org/Documents/Reports/PSA/PRC/PRC_PSA.pdf
  23. ^ a b "Ethiopia Dam Blot on China's Aid Record". South China Morning Post, Hong Kong. 7 June 2010. Retrieved 2 September 2012. 
  24. ^ Motoko Aizawa, Sustainability Advisor, International Finance Corporation. "China s Green Credit Policy". pp. 24 February 2011. Retrieved 2 September 2012. 

External links[edit]