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Industrial and Commercial Bank of China was established on 1 January 1984. On 28 October 2005, the Bank was wholly restructured to a joint-stock limited company. On 27 October 2006, the Bank was successfully listed on both Shanghai Stock Exchange and Stock Exchange of Hong Kong Limited. Through continuous endeavor and stable development, the Bank has developed into one of the top large listed banks in the world, possessing an excellent customer base, a diversified business structure, strong innovation capabilities and market competitiveness and providing comprehensive financial products and services to 5,784 thousand corporate customers and 530 million personal customers. With serving the real economy as the foothold of operation and management, the Bank has adhered to new ideas, new finance and new services to support the supply-side structural reform and economic transformation and upgrading and to achieve its own healthy and sustainable development. The Bank has further promoted reform and innovation as well as business transformation and developed retail finance, asset management, financial market and other businesses into important engines of profit growth. The pattern of internationalized and diversified operation was further improved, covering 42 countries and territories, and contributed more to the Bank’s profit-making. For the fourth consecutive year in 2016, the Bank ranked 1st place in the three authoritative lists of The Banker’s Top 1000 World Banks, the Forbes Global 2000 and the Fortune Global 500 Sub-list of Commercial Banks.

Financial Highlights
By the end of 2016, the total assets of the Bank was RMB 24,137,265 million, RMB 1,927,485 million or 8.7% higher than that at the end of last year. Total liabilities reached RMB 22,156,102 million, RMB 1,746,841 million or 8.6% higher than that at the end of last year. The whole year witnessed RMB 279.1 billion of net profits, increasing by 0.5%, 1.2% of average ROA, 15.24% of weighted return on net assets, 12.87% of core tier-1 CAR ratio, 13.42% of tier-1 CAR ratio, and 14.61% of capital adequacy ratio. Operating income amounted to RMB 675,891 million, a decrease of 3.1%. Specifically, net interest income was RMB 471,846 million, decreasing by 7.1%; non-interest income was RMB 204,045 million, growing by 7.5%; operating expenditure was RMB 315,576 million, decreasing by 6.7%, including RMB 175,156 million of business and management fee, decreasing by 1.5%; and the cost-income ratio was 25.91%.

Corporate Banking
At the end of 2016, the Bank’s corporate customers increased by 463 thousand over the end of the previous year to 5,784 thousand. The Bank was awarded the title of the “Best Corporate Bank in China” by Global Finance for seven years in a row.

1. Corporate deposits and loans. At the end of 2016, the balance of corporate loans reached RMB 8,140,684 million, representing an increase of RMB 271.132 billion or 3.4% over the end of the previous year; the balance of corporate deposits amounted to RMB 9,448,520 million, an increase of RMB1,011,506 million or 12.0%.

2. Small and medium-sized enterprise business. The Bank has promoted the special operating model of small and micro financial business center, established 198 small and micro financial business centers, adopted wholesale, standardized and one-stop service, and created small-amount guaranteed loans for micro customers, loans for the construction of fixed assets of small and micro enterprises, tax credit loans for small and micro enterprises, entrepreneurship secured loans and other new products. The Bank has won the China Business Journal’s SME Business Bank with Excellent Competitiveness; the brand of ICBC Small and Micro Enterprise Banking has won the Excellent Banking Service Award of the Year in the China International Financial Exhibition.

3. Institutional banking. The Bank has actively promoted interbank cooperation and innovation and maintained the 1st place in the market in terms of third-party custody fund for consecutive seven years. The Bank ranked the first in the banking industry in terms of the amount of central finance and government business cards under agency service, the amount of payments from pooled social security funds, as well as the number of local government bonds for which it was the underwriter and investment amount. The Bank has accelerated the promotion of cross-province out-of-region traffic fines and confiscation and local treasury-centralized electronic payment systems, with the business volume and transaction amount ranking first in the industry. The Bank has successfully put into operation electronic collection of local non-tax revenue and become the only and the first trail bank to put into operation all collection channels for one time.

4. Settlement and cash management. The Bank has depended on the five major platforms of Industrial and Commercial Enterprise Link, Small and Micro Enterprise Platform, ICBC e-Trade, ICBC e Bill Payment and Large-amount Fund Monitoring to expand customer scale, created new global cash management service, and provided customers with comprehensive financial solutions covering the six major product lines of account information, collection and payment, liquidity management, investment and financing, and risk management. At the end of 2016, the Bank maintained 6,960 thousand corporate settlement accounts, representing an increase of 8.8% over the end of the previous year, and the volume of settlements reached RMB 2,430 trillion, up 7.3% over the previous year. The Bank maintained its leading position in the business size. The Bank’s cash management customers grew by 12.7% to 1,431 thousand and global cash management customers stood at 5,764, representing an increase of 17.3%.

5. International settlement and trade finance. The Bank has actively developed export business from such aspects as product innovation, credit policy, approval procedure and green passage. The Bank has worked on the creation of “Internet + International Business”, continued to expand the trial scope of Bolero electronic presentation business, signed Headquarter-to-Headquarter cooperation agreement with ESS DOCS and further enriched the system of cross-border remittance product. In 2016, domestic branches disbursed an aggregate of USD70.2 billion in international trade finance. International settlements registered USD2.5 trillion, of which USD897.3 billion were handled by overseas institutions.

6. Investment banking. The Bank has promoted the equity financing business in the key areas such as the combined funds, government investment funds, mixed ownership reform and PPP projects, industrial funds and market-oriented funds, and provided equity financing consultancy services for nearly 100 enterprises. The Bank has actively expanded bond underwriting business and underwritten various debt financing instruments worth RMB 1,522.4 billion as a lead manager throughout 2016. It underwrote various green bonds worth RMB 38.3 billion and became the largest green bond underwriting bank in China. In 2016, its commission income of investment banking amounted to RMB 25.024 billion.

Personal Banking
At the end of 2016, personal financial assets totaled to RMB 12.20 trillion, representing an increase of RMB 0.61 trillion compared with the end of last year and making the Bank remain the largest holder of personal financial assets. Meanwhile, the Bank had 530 million personal customers, including 11.33 million personal loan customers, representing an increase of 33.02 million and 0.89 million from the end of the previous year respectively. Personal loans amounted to RMB 4,196,169 million, an increase of RMB 654,307 million or 18.5%. Personal deposits reached 8,140,281 million, an increase of RMB 539,167 million or 7.1%.

1. The Bank became the first to create the special service of “ICBC Cloud Manager”, provided customers with such online financial services as information, product promotion, problem consultation and online booking through ICBC Link, telephone and SMS, and built Internet Banking medical services platform.

2. The Bank was the first to promote the implementation of such innovated retail business products as the opening of II and III accounts, information verification as well as multi-mode transfer and remittances, established unified individual customer labels for the Bank, developed and put into operation individual customer marketing image system, formed the multi-dimensional rendering of individual customers’ characteristics, and realized the individuation of customers, recommendation of integrated products and services as well as the automatic assessment of customer investment behaviors and risk appetites.

3. Private banking. The Bank has accelerated the development of overseas private banking centers, built Hong Kong private banking and wealth management products center, strengthened the construction of global financial management funds and global sales network, and successfully issued the second sub-fund of the Global WM Fund. The Bank won the Asset’s Best Private Bank in China, the Asiamoney’s Best Private Bank in China and Best Private Bank for Global Investment Exposure, and the Securities Times’ Best Private Banking Brand in China. At the end of 2016, private banking customers reached 70,100, an increase of 7,700 or 12.3% over the previous year. The management assets amounted to RMB 1.21 trillion, an increase of RMB 146.8 billion or 14.2%.

4. Bank card business. The Bank has established the first domestic banking business development center and won the Global Finance’s Best Consumer Credit Card Program in China, Sina.com’s Best Credit Card of the Year, the National Business Daily’s Excellent Credit Card Brand, and the Financial Money’s Gold Credit Card Bank of the Year. In terms of debit card, it issued the first domestic class II account entity debit card. The issued amount of chip debit cards accounted for 59.5% of the total debit cards. At the end of 2016, 830 million bank cards were issued, an increase of 81.45 million over the previous year. The commission income of bank cards reached RMB 37,670 million.

Financial Asset Services
Seizing the opportunities arising from customers’ wealth increase and capital market growth, the Bank made efforts to establish a mega asset management business system across the whole value chain and enhance its specialized operating capabilities on the strength of the Group’s asset management, custody, pension and precious metal businesses, and the functions of its comprehensive subsidiaries specialized in fund, insurance, leasing and investment banking. Thus, the Bank rendered diversified and integrated financial asset services for its customers.

1. Wealth management business. The Bank has, through product form upgrade, time limit arrangement and net product transformation, continued to promote the innovation in the WM products and marketing models. Relying on big data, the Bank has carried out multi-dimensional rendering of wealth management customers and implemented the accurate marketing of personal wealth management products and appropriate configuration. At the end of 2016, the Bank’s stock wealth management products increased by 3.3% compared with the previous year end to RMB 2,702,944 million, remaining the largest in the industry.

2. Asset custody services. The Bank remained a market leader in respect of major custody products, e.g. securities investment funds, insurance, banking wealth management, enterprise annuities, special fund accounts and global asset custody. The Bank has successfully gained access to the national basic endowment insurance and the custody qualification of KSD. At the end of 2016, total net value of assets under the Bank’s custody increased by 22.6% from the previous year end to RMB 14.1 trillion. The Bank won The Asian Banker’s Custodian Bank of the Year in China.

3. Pension services. At the end of 2016, the pension funds under the Bank’s trusteeship amounted to RMB 96.2 billion; the Bank managed 16.67 million individual pension accounts, and the pension funds under the Bank’s custody totaled RMB 446.7 billion. The Bank led other banks in terms of the scale of enterprise annuity funds under the Bank’s trusteeship, number of individual enterprise annuity accounts and enterprise annuity funds under the Bank’s custody. The Bank won Industry Contribution Award and Best Performance Award of pension business granted by the China Banking Association.

4. Precious metal business. The Bank seized the market trend, realized the sales of a million sets of Disney theme products during the slack season, accelerated the integration into the international mainstream commodity market, and became the gold set business at the London Intercontinental Exchange. The Bank won the Euromoney’s Best Precious Metals Trading Bank in China for consecutive five years and the Global Finance’s Best Precious Metals Broker in China for the first time. In 2016, the transaction amount of precious metals business reached RMB 1.69 trillion, up by 35.2% over the previous year. The Bank cleared RMB 406.6 billion on behalf of the Shanghai Gold Exchange, ranking No. 1.

5. Agency treasury business. The Bank expanded the individual FX sales and purchase ability and the coverage of outlets, enriched the convertible currencies, opened FX sales and purchase business in the currency of 80 emerging-market economies of the “Belt and Road” initiative, and enabled the FX business to fully cover the countries along the “Belt and Road” initiative. The Bank became the first to promote accounts for natural gas and accounts for precious metal index products, and created and released new accounts for continuous trading products of crude oil. The above paper trading sized up 56.0% compared with the previous year to RMB 505.6 billion. The Bank earnestly practiced the Inclusive Finance and completed the issuance and sales of a total of 58 counter treasury bonds and 6 counter bonds of China Development Bank throughout the year. The volume of valet FX settlement and sales business reached USD390 billion. The franchise foreign exchange trading reached USD227.6 billion, an increase of 72.0% over the previous year.

6. Asset securitization business. In 2016, a total of four asset securitization projects were initiated, of which three were nonperforming asset-backed securities and one was individual housing mortgage loan asset-backed securities, and a total of RMB 15.763 billion was issued.

7. Agency sales. In 2016, the sales of agency fund reached RMB 488.9 billion; the sales of agency treasury bonds reached RMB 73.8 billion; the sales of agency insurance reached RMB 336 billion, an increase of 101.4%.

Treasury Operations
In 2016, the Bank combined with the financial trend with the need of liquidity management, flexibly adjusted investment and transaction strategies, rationally arranged for the types and structures of investments, and took multiple measures to improve the profitability of treasury operations.

1. Money market activities. The Bank enhanced the market research and judgment, rationally arranged for the term and type structure, improved the efficiency of treasury operation, and secured safe liquidity. In 2015, domestic trading amount in the interbank market was RMB 37.29 trillion, of which lending amounted to RMB 34.66 trillion; the transaction volume of foreign currency market reached USD285.2 billion.

2. Investment. The Bank actively participated in investing in local government bonds, corporate bonds and green bonds to effectively support the construction of real economy. In 2016, the transaction volume of RMB bonds and foreign currency bonds in trading book scored RMB 1,010.5 billion and USD9.8 billion respectively.

3. Financing. According to the operation of funds and needs for liquidity management, the Bank rationally arranged for such initiate indebtedness scale and structure as interbank market peers integration, short-term peer time deposit, peer certificate of deposit and large-amount certificate of deposit, and enhanced the support of diversified liabilities for the development of asset business.

E-finance
The Bank accelerated leading innovation and upgraded and improved the overall structure of internet finance covering and linking financial services, e-commerce, payment and social life with the three major platforms as the core.

1.ICBC Mobile. Focusing on the open, intelligent and personalized concept, the Bank conducted a comprehensive upgrade of the brand, function and service of ICBC Mobile. The Bank carried out in-depth product innovation, introduced such functions as code-sweeping withdraw, registration of friends and relatives and remittance to other overseas banks, used live broadcast and other new platforms to carry out various social marketing activities. In 2016, customers of ICBC Mobile exceeded 250 million.

2.ICBC Mall. The e-commerce platform “ICBC Mall” helps the Bank to gather together customers and merchants, connect trading and financing and innovate in the new-typed customer relationships featuring the integration of finance and commerce. The Bank accelerated the mobile-side construction of ICBC Mall and the customers with transaction concluded in the mobile side accounted for about a half. In 2016, ICBC Mall achieved an accumulative transaction amount of over RMB 1 trillion.

3.ICBC Link. The Bank introduced the first welfare public platform of “Public Welfare Version of ICBC e-Security” to prevent telecommunications fraud. In 2016, the Bank identified and intercepted a total of more than 60,000 telecommunications fraud, involving over RMB 900 million of funds. The Bank completed the switch of ICBC Messenger and used data mining method to position target customers and carry out precise marketing. In 2016, the customers of ICBC Link exceeded 60 million.

4.Financing product line. The Bank utilized internet and big data to establish the risk control models, improve the product and process, and realize self-service online operation, automatic business processing and accurate risk monitoring. The Bank improved the efficiency of corporate business, introduced corporate customers online credit loans, online bill pool pledge financing, electronic bank acceptance bill online billing and other products. The Bank carried out the activity of “RMB 1 daily interest for a loan of RMB 10,000” and established the good reputation of high-amount lending limit, sound price and quick arrival.

5.Payment product line. The Bank optimized the functions of its payment products, enriched the application scenarios, introduced QR code payment, promoted one-button payment, and enabled the customers of ICBC e-payment to exceed 100 million. The Bank became the first among peers to implement ApplePay online collection business and introduced such mobile payment products as Samsung Pay, Huawei Pay and MIUI Pay.

6. Investment and wealth management product line. The Bank improved the investment and trading system for individual investors, enabled the ICBC e-Investment to cover such multiple types as accounts for precious metals, accounts for crude oil and deposit gold, and increased the transaction types of accounts for natural gas, accounts for base metals and accounts for agricultural products. The whole year witnessed over RMB 500 billion of transaction amount.

Channel Development and Service Enhancement
1. The Bank promoted structural adjustment of offline channels and transformation of business models. The Bank controlled the total volume, optimized the deployment, actively promoted the construction of light outlets, promoted intelligent outlet service mode and improved the functions of intelligent service business. At the end of 2016, there were 16,429 physical outlets, 29,385 self-service banking facilities, and 100,083 ATMs with transaction amount reaching RMB 13,265.7 billion.

2. The Bank accelerated the strategic layout of online channels and functional improvement. The Bank put into operation the open personal online banking and customers of other banks could also enjoy financial services of the Bank on the Internet. The Bank released the “ICBC Smart”, an intelligent robot, in the online channels and realized the intelligent interaction with customers. The E-banking transaction amount hit RMB 599 trillion; the number of E-banking transactions accounted for 92.0% of total transactions of the Bank, rising by 1.8 percentage points from the last year.

3. Service enhancement. The Bank established the mechanisms for customer experience index and service quality monitoring and supervision mechanism, optimized the service experience of outlets and carried out special remediation of services. The Bank constructed service culture system, shaped unique service brand, integrated and improved the competitive strength of payment, loans and other key product lines, built efficient teams to integrate technology with business, increased efforts in expanding the participation of experience customers from other banks, and improved user experience.

4. Consumer protection. The Bank improved the systematic framework for consumer protection, completed the working mechanism, formulated supporting policies, and made consumer protection more systematic, standardized and institutionalized. The Bank fully implemented the principal responsibility of customer complaint processing, efficiently and properly resolved customer complaints, and paid attention to the treatment from the source so as to improve the customer experience and the standardized management of service and charge.

Internationalized and Diversified Operation
Based on internationalization and comprehensive management, with the help of global financing, investment banking, financial leasing and other investment and financing product lines, the Bank served the construction of the “Belt and Road” initiative and international production cooperation, and supported Chinese enterprises to “Go Global”.

The Bank steadily pushed forward the global network layout and channel construction and deepened the extension of network of overseas institutions. Netherlands, Belgium, Russia, Australia and other tier-2 networks have been expanded and the regional service capacity has been significantly enhanced. ICBC Moscow has become the seventh overseas RMB clearing bank of the Bank authorized by the People’s Bank of China. The Bank provided comprehensive cross-border financial services for the RMB asset allocation of overseas sovereign institutional customers and gradually became the preferred bank for foreign sovereign institutions to enter the Chinese market. The Bank introduced “ICBC Integrated Financial Solutions for Cross-border E-commerce” to build a cross-border e-commerce business brand unique to the Bank. As at the end of 2016, ICBC has set up 412 institutions in 42 countries and regions, and maintains 127 institutions in 18 countries and regions along the “Belt and Road” initiative. As at the end of 2016, total assets of overseas institutions (including overseas branches, subsidiaries and investments in Standard Bank) of the Bank were USD306,450 million, an increase of USD26,620 million or 9.5% from the end of the previous year, and they accounted for 8.8% of the Group’s total assets. Total loans amounted to USD175,871 million, rising by USD31,811 million or 22.1%, and total deposits were USD97,223 million, increasing by USD10,465 million or 12.1%. Profit before tax during the reporting period was USD3,247 million, increasing by 2.6% compared with the previous year, accounting for 6.2% of the pre-tax profit of the Group.

The Bank further consolidated the comprehensive subsidiaries’ profit contribution to and strategic synergies with the Group. ICBC Credit Suisse tightly grasped the policy and market opportunities to further enhance the functions of all-round asset management platforms and constantly enrich the product system. The scale of assets under management exceeded RMB 1 trillion. ICBC Leasing accelerated the steps of specialization, differentiation, characteristics and international development and realized the transformation from the development of scale and number to that of quality and efficiency. ICBC-AXA made more efforts in the transformation of regular business, resulting in the high-speed growth of premium income which thus drove the growth in the scale of investment assets, and the return on investment was significantly increased. ICBC International, as licensed investment bank of the Group, sped up the transformational development, paid equal attention to the traditional investment banking business and asset management, investment business, and steadily improved its sustainable development capacity.

IT-based Banking Development
The Bank continued to improve its production, operation and service system. The Bank put the new structure of “Two Places and Three Centers” into normal operation and implemented 84-day intra-city takeover operation; firstly completed the implementation of inner-city switch during the daytime business peak hours with the influence of switch and back-switch maintained at the level of minutes; promoted the intelligent monitoring platform and improved business monitoring; constantly improved the management system for available technologies and business continuity of disaster recovery and greatly enhanced the continuous operation of information systems.

The Bank continued to improve the customer information security protection system and increased efforts in the publicity of network security. The Bank succeeded in realizing such functions as one I account for one person, ATM delayed arrival, transfer limit and transaction control. The Bank introduced diversified financial services for II and III accounts in such channels of mobile banking and established and improved the long-term mechanism to prevent telecommunications fraud; became the first in the banking industry to introduce the first risk information service product - ICBC e-Security. A security monitoring and resolution platform was established to enhance the Bank’s ability to perceive internal and external security threats.

Surrounding its business transformation and the overall strategy of internet finance, the Bank actively practiced the concept of customer-oriented financial innovation, vigorously strengthened customer-centric, cross-profession and cross-channel integrated innovation and overall management, constantly improved and created new research and development mechanisms, strove to create products delivering ultimately good experience, continued to promote the construction of professional and innovative talent teams, and paid attention to giving the driving role of product innovation a play in the transformational development of the Bank.

The Bank actively promoted business innovation service covering all customers, channels and products. The Bank participated in the building of note transaction platform, supported the official operation of note trading platform, and improved the efficiency of note transaction. The pilot project of replacing the business tax with value-added tax was fully completed. The Bank released individual building-redemption loan, legal person network credit loan, account for natural gas, account for crude oil and other innovative products. Furthermore, the Bank advanced the system building in respect of international and diversified operations and smoothly rolled out the systems of ICBC Mexico, Zurich Branch and Prague Branch; completed ICBC Quick Remittance products and realized the cross-border directly-linking remittance with Standard Bank of South Africa; constantly optimized such systems as the new-generation core insurance business for individuals and insurance asset management of ICBC-AXA.

In 2016, the Bank obtained 52 patents from the State Intellectual Property Office, and the total number of patents owned by the Bank increased to 456. A total of eight scientific and technological achievements won PBC’s Technological Development Award. Specifically, the project of “Two Places and Three Centers”, winning the special award, was the only project that won the special award among the projects of 2016 Technological Development Award. The Bank ranked first in terms of the IT regulatory rating of CBRC in the industry for consecutive four years.

Risk Management
In 2016, the Bank continued to improve the compressive risk management system, constantly perfected risk management technologies and management means, increased the risk per-judgment and dynamic adjustment and control ability, and further improved the comprehensive risk management. The Bank did a good job in the consolidated risk management at the Group level, enhanced the risk limit management of non-banking subsidiaries, organized and carried out risk assessment of subsidiaries; it deepened the country risk management, improved the analysis and report of country risk monitoring as well as limit management, and increased the ability to manage and control sovereign risk; it improved the market risk management at the Group’s level, reinforced the market risk management of overseas institutions, and continued to do a good job of product control; it pushed ahead the implementation of advanced approach of asset management, constantly optimized the credit, market and operational risk measurement system, and strengthened continuous monitoring, optimization, validation and management application.

Social Responsibility
Regarding “Providing outstanding financial services — serving the customers, providing return to shareholders, realizing employee potential, contributing to society” as the objective of the Bank’s social responsibility, the Bank has always focused on the common needs of economic and social development and served the sustainable development of economic development and social progress. The Bank has continued to attach great importance to such key issues as precision poverty alleviation, green finance, Inclusive Finance and social welfare, improved the working mechanism and supporting policies, given a full play to the advantages of commercial banks in accordance with the principles of commercial sustainability, and actively fulfilled the social responsibility as a large state-owned bank. The Bank has been widely recognized by social walks and received many awards, including the Best Social Responsibility Financial Institution Award, the Poverty Alleviation Award of the Year, the First Place in the List of Chinese State-owned Listed Companies on Corporate Social Responsibilities, and the Most Responsible Enterprise.


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