Industrial and Commercial Bank of China
||This article may be expanded with text translated from the corresponding article in the Chinese Wikipedia. (May 2013)|
OTC Pink: IDCBY
|Founded||Beijing, China (1984 )|
|Key people||Jiang Jianqing
(Chairman & Executive Director)
Luo Xi (Vice president)
|Products||Finance and insurance
Global Wealth Management
|Revenue||CN¥ 475.21 billion (2011)|
|Net income||CN¥ 208.44 billion (2011)|
|Total assets||CN¥ 15.476 trillion (2011)|
|Total equity||CN¥ 957.82 billion (2011)|
|Industrial and Commercial Bank of China|
|Alternative Chinese name|
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. 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. In 2013, it ranked number 1 on Forbes Global 2000 list of worlds biggest public companies, and number 1 in The Banker's Top 1000 World Banks ranking - the first time ever for a Chinese bank, remaining top in 2014.
|This article or section may be slanted towards recent events. (September 2009)|
ICBC opened a branch in Luxembourg which became the European headquarters of the bank in 2011. ICBC (Europe) S.A. operates a network covering branches in major European cities, namely Paris, Amsterdam, Brussels, Milan, Madrid, Barcelona, Warsaw and Lisbon.
In the runup to its planned initial public offering, on 28 April 2006, three "strategic investors" injected US$3.7 billion into ICBC :
- Goldman Sachs purchased a 5.75% stake for US$2.6 billion, the largest sum Goldman Sachs has ever invested-
- Dresdner Bank (a wholly owned subsidiary of Commerzbank) invested US$1 billion.
- American Express invested US$200 million.
World's largest IPO
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. 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.
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
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.
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.
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.
As of 2006, ICBC has 2.5 million corporate customers and 150 million individual customers. 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%.
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)
- Secured by mortgages: 34.1%
- Secured by other collateral: 22.1%
- Guaranteed loans: 23.3%
- Unsecured loans: 20.5%
At the end of 2004, 19.1% of ICBC's portfolio consisted of non-performing loans. 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. This included an approval for a cash injection of US$15 billion (financed from China's massive foreign exchange reserves) on 28 April 2005. 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%).
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. It has also adopted the Green Credit Policy launched in 2007 by the Chinese Ministry of Environmental Protection. 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.
- List of asset management companies of the People's Republic of China
- Industrial and Commercial Bank of China (Canada)
- Financial Statements for Industrial and Commercial Bank of China - Google Finance
- ICBC tops Citigroup as world's biggest bank
- China's biggest bank goes to market, Financial Times
- "ICBC". Forbes. Retrieved April 19, 2013.
- "The World's Biggest Public Companies". Forbes. Retrieved June 6, 2011.
- "Top 1000 World Banks 2013". The Banker. Retrieved July 1, 2013.
- "Chinese bank tops global 1,000 ranking for first time". BBC. 1 July 2013. Retrieved July 1, 2013.
- "Bigger big banks". The Economist. 30 June 2014. Retrieved July 17, 2014.
- "Top 1000 World Banks 2014". The Banker. 30 June 2014. Retrieved July 17, 2014.
- "A dragon stirs". The Economist. 12 October 2006.
- http://edition.cnn.com/2006/BUSINESS/09/27/china.icbc.reut/index.html. Missing or empty
- Order Approving Establishment of a Branch-Industrial and Commercial Bank of China Limited
- China's largest bank to fund devastating Ethiopian dam, Survival International
- China's Biggest Bank to Support Africa's Most Destructive Dam, International Rivers
- "More Chinese banks stop transactions with N.Korea - Mubasher". English.mubasher.info. 2013-05-11. Retrieved 2013-05-18.
- Standard Bank to sell London business to ICBC for over $500 mln, International: Reuters, 31 July 2013
- World's Largest Banks / Securities Firms By Revenue
- ICBC surges on completion of IPO - FT.com
- China approves $15B bank injection -report - MarketWatch
- "Ethiopia Dam Blot on China's Aid Record". South China Morning Post, Hong Kong. 7 June 2010. Retrieved 2 September 2012.
- Motoko Aizawa, Sustainability Advisor, International Finance Corporation. "China s Green Credit Policy". pp. 24 February 2011. Retrieved 2 September 2012.
- (English) Financial Reports
- (Chinese) Industrial and Commercial Bank of China
- (English) Industrial and Commercial Bank of China