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ICBC Holds Annual General Meeting for the Year 2016

On June 27, 2017, ICBC held Annual General Meeting for the Year 2016 via video-conference between Hong Kong and Beijing. The Annual General Meeting approved the 2016 Work Report of the Board of Directors, 2016 Work Report of the Board of Supervisors, 2016 Audited Accounts, 2016 Profit Distribution Plan, Fixed Asset Investment Budget for 2017, Engagement of the External Auditor for 2017, and the Proposal on Non-executive Director Election of ICBC, and amended a series of proposals such as Amendments to the Articles of Association of Industrial and Commercial Bank of China Limited. ICBC Chairman Yi Huiman and President Gu Shu respectively attended the Annual General Meeting in Hong Kong and in Beijing, answering questions of shareholders on site.

As for financial technology, Chairman Yi Huiman said that ICBC’s internet financial business started well from the year to date with a steady rise in customer number, activity and business volume. For the next step, ICBC will focus on product perfection, scenario creation and institutional reform, create an open and integrated cooperation environment, and build up a smart banking service system with its strength in online and offline integration to upgrade from the internet-based strategy to smart banking strategy.

As for asset quality, a common concern of investors, President Gu Shu said that ICBC experienced a slowdown of NPLs growth rate quarter on quarter this year. ICBC’s key indicators such as special mention loans, overdue loans and NPLs and overdue “price scissors” have continue to improve, while NPL ratios in key loan products such as corporate loans and personal housing loans have remained at a low level. Through enhanced credit management, ICBC will be able to address the risk challenge in the future, keep asset quality stable and endeavor to lower NPL ratio in 2017.

On future profitability, according to Chairman Yi Huiman, ICBC has maintained a positive profit growth for many years despite a huge growth base. In the future, ICBC will be committed to five strategic directions to boost sustainable growth of profitability. First, ICBC will adhere to credit operation strategy, accelerate expansion into new high-quality credit markets, and manage asset quality to realize continued decline in cost of credit risk. Second, ICBC will accelerate the shift from a traditional commercial bank to an integrated financial service provider, speed up to improve financial service chains, and expand the scope of financial services. Third, ICBC will conduct fine management of capital, and strive to develop retail loan businesses that bear lower risk weight and capital consumption as well as non-credit businesses such as bond investment. Fourth, ICBC will deepen key-city strategy to improve competitiveness and profitability in 80 key cities. Fifth, ICBC will accelerate customer service strategy by optimizing channels and improving appraisal and incentive mechanism to win high-quality customers through financial services covering all products and the whole market.

Regarding recent measures of supervision enhancement by the regulatory body, President Gu Shu believed that the change in the regulatory environment had a structural effect on the banking industry, though its impact on ICBC would be mild and limited. For wealth management business, ICBC has been conducting asset management business in accordance with the relevant requirements and regulatory guidance of the CBRC, and ICBC’s business operation is compliant and prudent. For interbank businesses, ICBC has followed regulatory requirements to run such business by the Head Office and maintained interbank businesses at a relatively low rate on the balance sheet. For the entrusted investment, ICBC has adhered to independent investment supplemented by entrusted investment to entrusted investment at relatively low level with overall risks under control.

Besides, in the Proposal on Amendments to the Articles of Association approved at the Annual General Meeting, an important amendment is adding new provisions on Party building. According to Chairman Yi Huiman, first of all, despite no fixed rule for corporate governance worldwide, basic principle, vision and pursuit of corporate governance are the same. For instance, corporate governance models adhere to the principle of legal governance. New provisions on adding Party building to the Articles of Association comply with the Constitution of the People’s Republic of China and the Company Law of the People’s Republic of China. For another example, every corporate governance model pursues the goals of higher corporate value, shareholders’ return, and employees’ growth, and seeks a sustainable and long-term development of the company. The organic integration of Party building enhancement and corporate governance aims to enhance corporate value and better create returns for shareholders, repay the society and support employees. In addition, the corporate governance model must be tested by time and practice to prove its effectiveness, and only the models in line with market and actual corporate governance conditions are effective and scientific. Since the shareholding reform, ICBC has consistently refined the Party work mechanism and made the Party’s political edge an organic part of the core competitiveness of the whole bank. Over the ten years since ICBC was listed, the bank has made a historical breakthrough in business growth, ranking first in net profit for eight consecutive years and atop among global listed enterprises in terms of comprehensive strength for four consecutive years, distributing dividends of RMB 675.2 billion in cash to shareholders. The practice of ICBC has proved that the integration of Party building into corporate governance is conducive to establishing the enterprise’s core competitiveness, promoting sustainable development and prudent operation, enhancing corporate value and safeguarding interests of shareholders. Third, either the enhancement of the Party’s leadership or the governance structure comprising shareholders’ meeting, board of directors, board of supervisors and the senior management relies much on the effective selection, management, and employment of personnel as well as improvement of the power balance and supervision mechanism In this regard, the Party building and the corporate governance are complementary with each other. According to Chairman Yi Huiman, , the model of integrating Party building into modern corporate governance will play a more effective role through long-term adaption and institutionalization.