Industrial and Commercial Bank of China
Industrial and Commercial Bank of China Limited (abb. ICBC) is a Chinese multinational banking company. It is the largest bank in China, and the largest bank in the world by total assets, deposits, loans, number of customers and number of employees. 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 December 2017, it had assets worth US$4.009 trillion. Generally considered the largest financial institution and public company in the world by assets; it is the first Chinese bank to achieve such a feat. 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.
- 1 History
- 2 Basic figures
- 3 Environmental policy and record
- 4 Subsidiaries
- 5 Awards
- 6 See also
- 7 References
- 8 External links
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Possible 1910s connection
In a postscript to the 2004 Chinese drama 立秋 by 姚宝瑄, it is stated that the historical bank 丰德 (the 1910s subject of the play) later became ICBC.
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.
In 1999, 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 (at the time)
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, 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.
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.
On January 24, 2011, ICBC opened a branch office in Madrid, Spain.
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 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.
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.
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.
On February 17, 2016, the Spanish Guardia Civil raided the offices of ICBC in Madrid, Spain, investigating suspicions of money laundering.
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.
In October 2017, the Bank reported a 3.3 percent rise in its net profit for the third quarter.
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 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%).
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.
- Industrial and Commercial Bank of China (Asia)
- Industrial and Commercial Bank of China (Canada)
- Industrial and Commercial Bank of China (Macau)
- ICBC Turkey
- Best Banking Performer, China in 2016 by Global Brands Magazine Award.
- Global 2000 Rank #1 - World's Largest Public Companies in 2016 
- List of Awards to ICBC in 2016 
- "ICBC Annual Report 2016" (PDF). ICBC.
- "Top 100 Banks in the World". www.relbanks.com.
- "Top Banks in the World 2017". Banks around the World. 2017-12-31.
- "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.
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- "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.
- "The World's Biggest Public Companies List - Forbes". Retrieved 2016-11-06.
- "Gateway to Europe-Business-chinadaily.com.cn". usa.chinadaily.com.cn. Retrieved 4 December 2017.
- "ICBC's Five Branches in Europe Start Operation". Icbc.com.cn. Retrieved 11 January 2017.
- "A dragon stirs". The Economist. 12 October 2006.
- "VRL KnowledgeBank". Web.archive.org. 29 September 2007. Archived from the original on 29 September 2007. Retrieved 4 December 2017.
- [dead link]
- "Order Approving Establishment of a Branch-Industrial and Commercial Bank of China Limited" (PDF). Federalreserve.gov. Retrieved 4 December 2017.
- China's largest bank to fund devastating Ethiopian dam, Survival International
- China's Biggest Bank to Support Africa's Most Destructive Dam, International Rivers
- "Spain's Civil Guard Launches Money Laundering Operation Against China's ICBC In Madrid". Thespainreport.com. Archived from the original on 2018-05-27. Retrieved 11 January 2017.
- "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
- ICBC Sets up Kuwait Branch, International: www.icbc.com, 22 October 2014, archived from the original on 28 October 2014
- "Bank of the Year Awards 2014 – global and regional winners". The Banker. 28 November 2014. Retrieved 13 March 2015.
- "ICBC becomes active in Turkey". Hurriyet Daily News. 25 May 2015.
- "Using Chinese Money, a Hedge-Fund Startup Bets Big in Treasuries", Bloomberg.com, 22 August 2016
- "ICBC launches robo-adviser service for wealth-management products". South China Morning Post. Retrieved 2017-11-14.
- "ICBC Begins Robo Wealth Management". Finews.asia. Retrieved 2017-11-14.
- "UPDATE 1-China's top bank ICBC Q3 profit rises 3.3 pct, above estimates". Reuters. 2017. Retrieved 2017-11-14.
- "Nation's largest commercial bank launches IPO". Chinadaily.com.cn. Retrieved 4 December 2017.
- [dead link]
- "HITC Business - News". News.hereisthecity.com. Retrieved 11 January 2017.
- "C05022403.htm". Web.archive.org. 21 October 2006. Archived from the original on 21 October 2006. Retrieved 4 December 2017.
- Mitchell, Tom (28 October 2006). "ICBC surges on completion of IPO". Ft.com. Retrieved 11 January 2017 – via Financial Times.
- "China approves $15B bank injection". MarketWatch.com. Retrieved 11 January 2017.
- "Wayback Machine" (PDF). Web.archive.org. 7 October 2007. Archived from the original (PDF) on 7 October 2007. Retrieved 4 December 2017.
- "Ethiopia Dam Blot on China's Aid Record". South China Morning Post, Hong Kong. 7 June 2010. Archived from the original on 28 March 2014. Retrieved 2 September 2012.
- Motoko Aizawa, Sustainability Advisor, International Finance Corporation. "China s Green Credit Policy" (PDF). pp. 24 February 2011. Retrieved 2 September 2012.
- "AWARD WINNERS 2016 - Global Brands Magazine". Globalbrandsmagazine.com. Retrieved 11 January 2017.
- Schaefer, Steve. "Industrial and Commercial Bank of China - pg.2". Forbes. Retrieved 2016-11-14.
- "ICBC Awards & Rating 2016". ICBC.