In 2012, the Bank continued to advance the transformation of corporate banking, kept optimizing the business structure and effectively adapted itself to the interest rate marketization, to realize sustainable development of corporate banking. The Bank introduced all-product marketing and comprehensive financial services and promoted interaction between commercial banking and investment banking, so as to satisfy customers' diversified financial needs. It also enhanced business innovation and boosted the development of financial assets services such as asset management, entrusted management, agency trade, underwriting and consultancy, agency sales, etc. Relying on the global service network and the integrated technological platform of domestic and overseas operations, the Bank accelerated the development of global cash management and cross-border RMB business, and enhanced its global service capability and its brand's international infl uence. Through innovation of the marketing system, the Bank provided differentiated services for customers at different tiers, enhanced the marketing and service quality for key customers, and expanded the customer base by winning over more small and medium enterprise (SME) customers.
The Bank was awarded the "Best Corporate Bank in China" by Global Finance. At the end of 2012, the Bank had 4.38 million corporate customers, representing an increase of 270 thousand customers from the end of the previous year; among them, 143 thousand corporate customers had loan balances with the Bank, representing an increase of 16 thousand customers. According to statistics from PBC, at the end of 2012, the Bank ranked first in the banking industry in terms of corporate loans and corporate deposits, with a market share of 11.8% and 12.6%, respectively.
Corporate Deposits and Loans
In response to changes in the macroeconomic environment, the Bank optimized the distribution of lending and further adjusted the credit structure for steady and healthy development of the credit business. It proactively provided support for the real economy, satisfied funding needs of key national investment projects under construction and continuing construction, extended more loans to Central and Western China and Northeastern China and vigorously expanded its businesses in the four new markets of advanced manufacturing, modern service industry, cultural industries and strategic emerging industries. The Bank also strengthened management of lending to local government financing vehicles (LGFVs) and controlled loans to the real estate industry and industries with high energy consumption, high pollution and overcapacity, and gave financial support to all kinds of major energy-conserving and emission-reduction projects. It also enhanced product innovation and accelerated the development of high-profit and capital-saving loan products. The Bank promoted financing to the supply chain of enterprises to drive the development of SMEs credit business. Besides, it actively engaged in syndicated loan business and won the "Best Performance Award" and "Best Deal Award" by China Banking Association. In addition, the Bank stepped up its efforts to compete for major group customers and industrial leaders, and look for new customers among core enterprises and upstream and downstream SMEs of supply chains, in a bid to realize balanced growth of large, medium and small customers with high quality. At the end of 2012, the balance of domestic corporate loans reached RMB5,844,835 million, representing an increase of RMB629,230 million or 12.1% over the end of the previous year.
In response to challenges posed by the liberalization of interest rates, the Bank leveraged on its advantages in integrated financial services such as corporate wealth management, cash management, E-banking and assets custody to sharpen its market competitiveness in corporate deposits business. The Bank, based on its advantages in customer resources and service networks, explored new customers in the upstream and downstream of industrial chains to expand its customer base and to absorb and accumulate customers' funds. At the end of 2012, the balance of domestic corporate deposits amounted to RMB6,621,725 million, representing an increase of RMB692,976 million or 11.7% from the end of the previous year.
Small and Medium Enterprise Business
In conformity with government's support to the development of SMEs, the Bank was dedicated to providing professional, efficient and convenient financial services to SME customers. The Bank served SME customers in an allround manner by building an independent system of small enterprise credit policies, process and products and giving priority to credit resource allocation in this regard. The Bank promoted its specialized operations, bringing the number of small enterprise franchised institutions providing financial services to over 1,400 and the number of employees qualified for SME credit business to 35 thousand. It also accelerated the application of new products and propelled the promotion of exclusive financing products such as small business revolving loans, online revolving loans and standard plant mortgage loans to meet diverse financing needs of small enterprise customers. In addition, the Bank offered financing services to supply chains surrounding core enterprises, and provided financial solutions to small and micro enterprises in specialized markets and industrial clusters, so as to expand the customer base. Moreover, it strengthened management over entrusted payment of lending funds, and strictly controlled small enterprise credit risk to ensure the sound development of small enterprise credit business. The Bank was awarded by China Association of Small and Medium Enterprises as "Excellent Service Organization for SMEs". At the end of 2012, the balance of loans to domestic small (micro) and medium-sized enterprises was RMB4,231,203 million, representing an increase of 15.2% from the end of the previous year, among which the balance of loans to medium-sized enterprises was RMB2,391,127 million and that to small and micro enterprises was RMB1,840,076 million, up by 20.7% and 8.9%, respectively.
The Bank carried out the strategy of "all-institutional banking" to enhance the sustainable development capacity of institutional banking. It intensified its efforts in financially serving people's livelihood, promoted its comprehensive financial services solutions, and accelerated the building of comprehensive service management system for social insurance and housing allowance. It won the bid for "2013–2014 banking agency collection for non-tax items under central finance", maintaining its leading position in the number of newly opened accounts for nontax collection.
The number of financial social security IC cards increased by 1.6 times over the previous year and the number of business cards to central budget units rose by 37.8%. The Bank also promoted inter-bank cooperation and propelled development of such businesses as RMB financing, payment and settlement agency, foreign exchange clearing, international settlement and trade finance, increasing the number of contracted customers of the bank-to-bank platform by 100 to 271, and increasing the number of domestic correspondent banks by 25 to 141. In addition, with reference to new policies and regulations governing the capital market, the Bank strengthened its innovative cooperation with securities companies to level up its service quality, and both the number of customers and the volume of funds involved in third-party depository maintained a leading position among peers. Besides, the Bank conducted comprehensive marketing to issuance companies, to reinforce all-round cooperation in bancassurance, payroll payment agency service, assets custody, cash management and other fields.
Settlement and Cash Management
The Bank continued to promote its "E Express for Capital Verification" to expand its customer base. It adopted the strategies of cluster marketing and chain marketing to consolidate the size of customer base and optimize customer structure. The Bank also upgraded the functions of "Caizhi Account" cards, corporate self-service machines and other products, and introduced new businesses like "deposits automatic transfer", to enhance the brand infl uence of "Caizhi Account" and expand the scale of settlement business. At the end of 2012, the Bank had 5.36 million corporate settlement accounts and the volume of corporate RMB settlement had reached RMB1,446 trillion, enabling the Bank to maintain its position as a market leader.
The Bank expanded the coverage of cash management products and services, and promoted high-end cash management services such as Collection Manager, bill pool and fund pool, raising its competitive edge in the cash management market. It also improved the business procedures for cash management to lift the business efficiency.
Besides, it conducted cluster marketing to the manufacturing industry and service industry to expand the customer base. With increasingly stronger market infl uence of cash management business, the Bank won the "Best Large Corporate/MNC Treasury & Working Capital Bank (China)" by The Asset, and the "Leading Counterparty Bank in Asia Pacific" and the "Best Cash Management Bank in China" by The Asian Banker. At the end of 2012, the Bank had 813 thousand cash management customers, representing an increase of 23.0% from the end of the previous year.
International Settlement and Trade Finance
Leveraging on the Bank's advantages in local and foreign currency resources and close interaction between domestic and overseas branches, the Bank improved its product portfolios integrating financing, settlement, wealth management and trading, to enhance its services to import and export enterprises. It also provided import advance payment financing and export order financing to diversify the international trade finance product line. Accommodating to the trend of industrial movement, the Bank intensified its financial support to international trade finance in Central and Western China and Northeastern China, so as to optimize the regional structure of the business. Moreover, it continued to advance the intensive operation of international settlement and trade finance and put into operation all document processing center systems in domestic and overseas institutions, accumulatively completing business centralization of international settlement documents and trade finance in 39 domestic institutions and 34 overseas institutions. In 2012, domestic branches disbursed an aggregate of USD146.1 billion in international trade finance, representing an increase of 52.2% from last year. The transaction volume of international settlement reached USD1,925.2 billion, representing an increase of 25.8%, of which USD534.3 billion was processed by overseas institutions.
The Bank carried on with promoting the synergy between investment banking and commercial banking, expanded equity financing, restructuring and M&A, structured financing, bond underwriting and other investment banking services. Seizing opportunities created by additional private placement of listed companies, mezzanine financing of key customers and initial public offering of large central enterprises, the Bank improved its equity financing product line consisting of equity investment funds as lead bank, enterprise listing advisory and private equity advisory, to meet enterprises' equity financing needs. It made use of its advantages in "financing + consulting" comprehensive restructuring and M&A service mode to promote the M&A and integration of domestic coal industry and improve its capacity in cross-border M&A operation. Besides, the Bank broadened non-credit financing channels for enterprises and innovated and developed such new products as debt restructuring and overseas greenfield investment consulting, to improve the quality of its financial consulting service. The Bank enriched the investment banking R&D products system, broadened channels for electronic investment banking and improved the quality of advisory service. It also expanded its bond underwriting business and underwrote RMB348.6 billion worth of debt financing instruments in 2012. Given the ever-increasing infl uence of its investment banking brand, the Bank was awarded the "Best Bank in Investment Banking" by Securities Times for four consecutive years. In 2012, the investment banking income was RMB26,117 million, representing an increase of 15.6% from the previous year.
Asset Custody Services
The Bank actively responded to the prior downturn of the capital markets, intensified its business innovation and consolidated its leading market position. It vigorously developed fund custody products with fixed income, and successively launched several new fund custody products, including innovative wealth management bond funds, the first cross-market ETF and the first initiating fund. With an increase of 30.5% in fund custody scale compared with the end of the previous year, it maintained its position as a market leader. The Bank intensified marketing to key insurance companies, making the number of insurance custody customers exceed 70 and the insurance assets under its custody increase steadily. Its global custody business maintained strong momentum and the number of QFII customers ranked first among Chinese-funded banks and the QDII asset size under its custody topped the custody market. In addition, the Bank strengthened cooperation with asset management institutions to promote "Custody Wealth Management", bill custody, futures asset custody and other services, so that the structure of custody business can be optimized. The Bank was recognized as the best custodian bank in China by renowned financial journals twice in a row, including the Global Custodian, Global Finance and The Asset, further improving its brand impact. At the end of 2012, the total net value of assets under the Bank's custody reached RMB3,955.3 billion, representing an increase of 12.0% from the end of the previous year.
Relying on its market advantages in complete business qualifications and rich service experience, the Bank accelerated its expansion of the pension market to increase its business scale. It worked out customized enterprise annuity service schemes based on customer needs to improve the service capacity to large corporate customers. The Bank promoted integrated enterprise annuity schemes such as the "Ruyi Pension Management" to expand the enterprise annuity market of SMEs. It also introduced a series of welfare schemes and pension management products named "Ruyi Life" to meet the welfare fund management needs of employees from enterprises and public institutions. At the end of 2012, the Bank provided pension management services for 34,140 enterprises, representing an increase of 4,716 from the end of the previous year; the pension funds under the Bank's trusteeship amounted to RMB51.2 billion; the Bank managed 11.68 million individual pension accounts, and the pension funds under the Bank's custody totaled RMB229.3 billion. The Bank led the market 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.
Precious Metal Business
In the face of fl uctuations of the precious metal market, the Bank proactively adjusted its business structure and diversified its products to promote continuously steady growth in precious metal business. It innovatively introduced industrial chain gold leasing business and provided customers with forward swap services, to help customers lock out leasing risks and thereby promote rapid development of financing business. Giving play to its advantages in gold storage business, the Bank explored new functions such as universal storage and withdrawal and conversion extension to realize sustained growth of gold storage business. Besides, the Bank accelerated innovation in physical precious metal products, introduced 115 new products including precious metal products of culture series, to satisfy customers' needs in investment, collection, maintenance and appreciation of values of precious metal. The Bank improved the functions of trading systems, and introduced deferred trading to corporate customers, realizing twoway trading and AIP trading of Paper Precious Metals. In 2012, the total amount of precious metal business reached RMB1.09 trillion. The Bank cleared RMB254.6 billion on behalf of Shanghai Gold Exchange, maintaining the leading position among peers.
In 2012, in face of challenges brought about by fierce competition of the banking sector and interest rate marketization, the Bank continued to carry out its "strong personal banking" strategy to advance the transformation of personal banking operation. Targeting at new markets and new customers, public and private departments of the Bank jointly conducted cluster marketing to develop commodity trading market and explore such livelihood fields as social insurance, health care and transportation. Relying on its ICBC Business Friendship Club and Celebrity Wealth Management Club, the Bank created new marketing channels and expanded its business scale. In addition, the Bank continued to upgrade its service channels, put more self-service machines into operation and broadened the commodity trading market and the service channels of major county regions. Centering on the star service system for personal customers, the Bank stepped up efforts in the building of a marketing service team, accelerated the transformation of customer service mode and improved its ability in identifying and obtaining new quality customers.
What's more, the Bank accelerated product innovation and enhanced the competitive edge of personal banking business, securing its leading position among peers in terms of savings deposits, personal loans, banking wealth management and credit card business. The Bank was awarded the "Best Retail Bank in China" by The Asian Banker twice in a row. At the end of 2012, the Bank had 393 million personal customers, including 7.79 million personal loan customers, representing an increase of 30.53 million and 400 thousand from the end of the previous year, respectively. According to statistics from PBC, as at the end of 2012, the Bank ranked first in the industry in terms of both the size of savings deposits and personal loans, with a market share of 16.3% and 13.9% respectively.
The Bank further promoted coordinated marketing of corporate banking and personal banking, explored source markets and expanded customer base by focusing on payroll payment agency service and commodity trading market business, which helped to consolidate the basis for savings deposits growth. Adapting to interest rate liberalization, the Bank enhanced refined management of interest rates, reasonably determined the deposit interest rates and pricing of wealth management products, attracted and retained customers with quality wealth management products, and promoted orderly circulation of customer funds in the Bank's system, realizing the coordinated development of savings deposits and wealth management business. The Bank also accelerated the construction of new outlets in key counties, quickened self-service machine installation and broadened the service channels to extend the service coverage. At the end of 2012, the balance of the Bank's domestic savings deposits amounted to RMB6,481,891 million, representing an increase of RMB638,032 million or 10.9% from the end of the previous year, of which demand savings deposits increased by 8.8% and time savings deposits increased by 12.6%.
The Bank implemented differentiated housing credit policy to support the credit needs of the borrowers eligible for first personal housing and improvement housing mortgage and propelled steady growth in personal housing loans. Adapting to new consumption needs, the Bank accelerated product innovation and upgrading, promoted public consumption loans, including household consumption loans,personal cultural consumption loans, and personal overseas study loans. It also introduced Personal Business Loan of Small Amounts of Money to meet small-amount financing needs of personal business activities, and promoted personal business loans for key commodity trading markets. For investment and wealth management customers, the Bank also introduced pledged loans of Paper Precious Metals and Internet banking pledged loans of wealth management products to meet new types of financing needs of customers. Moreover, the Bank enhanced the ICBC Brand of Happy Loan consisting of personal housing loans, personal consumption loans and personal business loans. At the end of 2012, domestic personal loans amounted to RMB2,250,410 million, representing an increase of RMB259,139 million or 13.0% from the end of the previous year, of which, personal housing loans increased by RMB148,217 million or 12.6%, and personal business loans increased by RMB51,978 million or 19.7%.
Personal Wealth Management
Based on customer needs, the Bank intensified innovation in wealth management products and optimized product structure to maintain its leading position in the market. The Bank diversified its exclusive banking wealth management products and optimized the customized wealth management product mechanism to enhance its differentiated customer services and expand personal wealth management services in commodity trading markets and economically developed regions. In addition, the Bank strengthened cooperation with asset management institutions, conducted agency sales for several new fund products, kept the preferential fees for fund acquisition via E-banking channels and distributed RMB761.4 billion worth of funds, leading its peers in the banking industry. Moreover, the Bank leveraged on the stable return of government debts to explore the market of customers with low risk appetite and conducted agency sales of RMB60 billion worth of government debts, securing its leading market position. It also reinforced marketing of insurance products, organized many special marketing campaigns and conducted agency sales of RMB86 billion worth of personal insurance products, ranking No.1 among peers. In 2012, sales of various personal wealth management products amounted to RMB4,670.6 billion, representing an increase of 12.9% compared with the previous year, of which agency sales of personal banking wealth management products increased by 57.3% to RMB907.4 billion.
Relying on the star-class services for personal customers, the Bank picked up speed in expanding Elite Club Account customers and enhanced the image of Elite Club Brand. By bringing into play the leading technological advantages of chip card business, the Bank promoted the chip cards of Elite Club Accounts to improve its customer service quality, and it promoted cross-selling of products to increase the number of high-net-worth individual customers using its core products. The Bank also built a high quality service team and enhanced its service capability to provide on-stop package services for wealthy customers. The number of employees with certificates of Associate Financial Planner (AFP) and Certified Financial Planner (CFP) was 21,425 and 3,533 respectively, securing the leading position in the banking industry. At the end of 2012, the number of Elite Club Account customers and wealthy customers stood at 20.42 million and 4.02 million respectively, representing an increase of 35.9% and 5.0% compared with the end of the previous year respectively.
The Bank provided high-net-worth customers with RMB8 million or more personal financial assets with private banking services including financial management, asset management, consulting, private wealth accumulation and cross-border financing. In 2012, the Bank quickened its service network expansion for private banking, and apart from the ten private banking branches, the Bank accumulatively established 26 private banking centers, making the business gradually cover all national markets of high-end customers. It also proactively expanded the overseas business, and established the Private Banking Center (Europe) in Paris to improve its cross-border financial assets management and services. The Bank integrated quality resources across the whole bank to enrich the exclusive product line of private banking, providing private banking customers with financial services integrating investment and financing in public and private sectors at home and abroad. The Bank was awarded the title of the best private banking in China by Euromoney and Asia Banker, respectively. At the end of 2012, the Bank had a pool of over 26 thousand private banking customers and managed RMB473.2 billion worth of assets.
Bank Card Business
In 2012, the Bank boosted product innovation and service upgrading in terms of its bank card business and accelerated expansion of new markets, further consolidating its leading position in the banking industry. At the end of 2012, the Bank had issued approximately 470 million bank cards, an increase of 56.30 million cards from the end of the previous year. Annual consumption volume of bank cards stood at RMB4,131.4 billion, representing an increase of 29.0% from the previous year. Income from bank card business amounted to RMB23,494 million, representing an increase of 36.1%.
• Credit Card Business
The Bank issued five types of cards, namely transportation card, business card, CNPC refueling card, housing fund card and co-brand air travel card, and expanded the volume of card issuance. It strengthened marketing to group merchants to increase the proportion of merchants with high turnover, high trading volume and high income and quicken the growth of acquiring business. Taking advantage of the trend of new consumption industries, the Bank strengthened its advantages in installment payment for cars, and promoted credit card payment for consumption in household electrical appliances, general merchandises, education, travel and culture, to meet citizens' needs in consumption financing and promote the sustainable growth of credit card payment business. Based on market demand, the Bank innovatively introduced Multi-currency ICBC Credit Card, ICBC QuickPay Card, ICBC Money Fund Credit Card and other products to enrich its credit card product line. The Bank was the first to launch ICBC-AE Centurion Black Card in China to meet customers' needs for customized high-end services. The Bank also extended the service contents of SMS banking to cover statement of account inquiry, transaction detail inquiry and automatic repayment activation. The Bank won the titles of "Best Credit Card Bank in China" granted by Global Finance and "Comprehensive Model Award" and "Excellent Service Award" given by China Banking Association. At the end of 2012, 77.13 million credit cards were issued, representing an increase of 6.48 million from the end of the previous year; the consumption volume stood at RMB1,302.6 billion, representing an increase of 33.4% from the previous year; the balance of domestic personal credit card overdrafts amounted to RMB241,425 million, representing an increase of RMB63,625 million or 35.8%. The Bank led the peers in terms of volume of cards issued, consumption volume and overdrafts.
• Debit Card Business
Focusing on the issuance of co-brand debit cards, the Bank intensified industry cooperation and joint marketing to attract new customers and expand the volume of card issuance. It reinforced innovation of chip cards and launched the first single chip debit card, the first chip debit card with eID function and the first precious metal series debit card in China and other new products, maintaining its leading market position. It accelerated the promotion of chip cards, extended the product line of chip cards and propelled the rapid growth of the issuance volume of chip cards. In addition, the Bank seized the market opportunities to carry out many promotion activities for card-based consumption to expand the amount of payment by cards. At the end of 2012, 390 million debit cards were issued, representing an increase of 49.82 million from the end of the previous year. Debit card consumption amounted to RMB2,828.8 billion in 2012, representing an increase of 27.0% from the previous year.
In 2012, the Bank, facing complex financial environment, aimed at enhancing its profitability and achieved sound development of asset size and performance through active product innovation, timely adjustment of investment and trading strategies, optimization of capital operation, improvement of business management level and prevention of business risks.
Money Market Activities
In 2012, interest rate in the money market rose first and then declined, posting an overall slight decrease. Considering the needs of liquidity management, the Bank carried out capital operation fl exibly based on improved predictions on the market trends. In terms of capital borrowing, the Bank leveraged its leading market position to reduce borrowing costs, thereby ensuring the liquidity security and maintaining a reasonable cash reserve ratio. In terms of capital lending, the Bank timely adjusted the financing term, proactively expanded capital lending channels and enlarged the financing customer base, so as to increase yield on capital lending. In 2012, domestic operations of the Bank traded RMB21.90 trillion, of which lending amounted to RMB13.42 trillion, taking the first place in the market in terms of trading amount.
In respect of foreign currencies, the tension of liquidity on onshore market was relieved. The Bank strengthened the position management for foreign exchange funds and set aside funds to cope with large amount payment, to ensure sufficient supply of foreign exchange payment. It also arranged term structure rationally and appropriately lengthened terms of inter-bank lending and borrowing to improve the yield. In addition, the Bank closely observed market developments and selected counterparties prudently to mitigate credit risk. In 2012, the Bank's foreign exchange transaction volume in money markets amounted to USD291.8 billion.
Trading Book Business
In 2012, indicators in the RMB bond market witnessed an upward trend in general. Under the strategies of duration control and market timing, the Bank adjusted positions fl exibly based on interest rate trends. Amid the higher interest rate at the beginning of the year, the Bank appropriately expanded the exposure of trading book bonds; amid the downward interest rate, the Bank employed the strategy of cutting its holding and reduced the duration of bond portfolios in trading book and thus realized income from bond interest rate spread. The Bank also strictly controlled the general position of interest rate swaps to mitigate fl uctuations in the losses and gains of interest rate swap business. In the year, the transaction volume of RMB bonds in trading book was RMB311.7 billion.
In respect of foreign currencies, the yields on government bonds of major developed economies tended to stabilize at a low level. Seizing the opportunities of market fl uctuations, the Bank conducted short-term trading, mainly in US government bonds, and it strictly controlled trading risks, while achieving an aggregate transaction volume of USD8.2 billion of foreign currency bond in trading book.
Banking Book Investment
In 2012, the bond yield curve showed remarkable changes in different stages, and in general it presented a fl atly upward trend. The Bank rationally arranged the timing of investment based on its further study on the market trend.
It made more bond investments in the first and fourth quarters when the yield was high to increase the yield on the investment portfolios. The Bank insisted on higher value investing, arranging durations of bonds reasonably, and investing in medium and short-term bonds with higher value when the yield curve showed a fl at trend. It increased investment in policy financial bonds and quality corporate bonds and increased the proportion of debentures to optimize the structure of investment portfolio.
In respect of foreign currencies, the continuing sovereign debt crisis in Europe gave rise to severe turbulence in international financial markets. The Bank proactively adjusted the investment variety and structure and seized good opportunities to increase its holdings of financial institution bonds and overseas USD bonds of Chinese-funded enterprises to improve yield on investment portfolios. Besides, it also reinforced regional management of investment, and increased its investment in products in the United States, South Korea, Australia and other regions, so as to enhance portfolio security.
Franchise Treasury Business
The Bank expanded its franchise treasury product line to enhance market competitiveness. It began to engage in foreign exchange trading in personal account, two-way personal foreign exchange trading, corporate Internet banking foreign exchange trading and other new businesses. The franchise foreign exchange trading volume (excluding Paper Precious Metals) reached USD52 billion, representing an increase of 52.0% compared with the previous year. Grasping opportunities brought by more fl exible RMB exchange rates, the Bank increased the promotion of foreign exchange purchase and sales, introduced such products as RMB foreign exchange option portfolio and portfolio of RMB foreign exchange option with trade finance and engaged in foreign exchange trading in emerging markets, including Thai Baht, Philippine Peso and South Africa Rand. In 2012, the volume of franchise foreign exchange purchase and sales amounted to USD427.1 billion, representing an increase of 11.8% compared with the previous year. With the basis on standard hedging exchange rate and interest rate risk management products, the Bank conducted foreign exchange derivatives business and upgraded functions of the trading systems to enhance the service quality of foreign exchange derivatives business and promote steady development of franchise derivatives business.
In 2012, closely tracking the market trends, the Bank intensified its inputs in bill business. It proactively supported enterprises by discounting bills, to satisfy their financing needs and serve the development of the real economy. It also increased the number of SME customers of discounted bills, expanded the customer base for discounted bills and continued to improve the customer structure. Besides, the Bank increased the bill purchase and sales frequency, accelerated the turnover of bill business and enhanced the efficiency and profitability of bill trading. It also vigorously developed electronic commercial bill business and optimized the structure of bill products. In addition, the Bank improved the asset quality of bills and strictly controlled business risks to ensure sustained and healthy development of the bill business. In 2012, the trading volume of bill business was RMB1,871.4 billion, representing an increase of 35.9% compared with the previous year.
Wealth Management Business
Based on the market trend, the Bank strengthened product and business innovation to meet the investment needs of customers. It segmented the personal customer markets, providing commodity market customers with exclusive wealth management product "Merchant Friend Wealth", offering exclusive wealth management products "New Outlets" to newly-established outlets and conducting issuance specific to the regions with high wealth management demands, such as the Yangtze River Delta and Pearl River Delta. The Bank strived to provide corporate customers with tailored wealth management services by combining pooled products and special account wealth management.
It introduced several series of "profit-gaining" wealth management products with different terms, increased the redemption proportion of T+0 wealth management products and shortened the time for fund transfer of wealth management products to improve fund utilization efficiency of customers. It also broadened the sales channels of wealth management products, made online sales available for all products and sold wealth management products through mobile banking. In addition, the Bank timely and accurately disclosed information on wealth management products, guaranteed investors' right to know, so as to ensure sound and healthy development of wealth management business. The Bank was awarded the "Best Asset Management Bank" by Global Entrepreneur. In 2012, the total sales of banking wealth management products amounted to RMB5,916.5 billion, of which the sales of personal wealth management products and corporate wealth management products was RMB3,763.2 billion and RMB2,153.3 billion, respectively.
Domestic Branch Network
In 2012, centering on customer services, the Bank continued to pushed forward the channel optimization. It rationally expanded the channels and network in fast-developing new urban areas and emerging cities, and established and put into operation 433 new outlets in the year. The Bank stepped up the reconstruction of outlets with small business area, few employees and low performance, and adjusted 547 outlets with low efficiency, thereby effectively improving the service capabilities of outlets. The Bank strengthened the distribution of physical outlets and self-service banking outlets by building 1,777 independent self-service banking outlets, enhancing the service level of self-service channels.
At the end of 2012, the Bank had 17,125 domestic institutions, including the Head Office, 31 Tier-one Branches, 5 branches directly controlled by the Head Office, 26 banking offices of Tier-one Branches, 400 Tier-two Branches, 3,069 Tier-one Sub-branches, 13,520 outlets, 34 institutions directly controlled by the Head Office and their branches, and 39 majority controlling subsidiaries and their branches.
Being customer-centered and market-oriented, the Bank continuously reinforced its leading position in innovation, expedited developing new fields, new markets and new customers, accelerated overseas business expansion and further strengthened risk prevention and control to ensure the balanced and rapid development of E-banking business in scale, quality and efficiency. The Bank vigorously promoted the brand of "ICBC Mobile Banking" and focused on the expansion of major markets such as mobile banking and e-commerce, which enhanced its brand recognition and further consolidated its market competitiveness. In 2012, the transaction volume of E-banking increased by 17.2% compared with the previous year. The number of E-banking transactions accounted for 75.1% of total transactions of the Bank, representing an increase of 5 percentage points from the previous year, further enhancing the role of E-banking as a transaction channel.
• Internet Banking
The Bank consolidated the position of Internet banking as the major transaction channel and introduced personal Internet banking systems accommodating to Apple Mac, Google and Android Tablet, covering all the mainstream operating systems, browsers and tablets. The Bank provided private banking zone in the Internet banking system for PC users and iPad users, building up an exclusive service platform for quality customers. It also added innovative functions to the corporate banking system, including foreign exchange trading and Gold Accumulation Products service, to enrich the corporate Internet banking product lines. The Bank was awarded the "Best Consumer Internet Bank in China" and "Best Corporate/Institutional Internet Bank in China" by Global Finance.
• Telephone Banking
The Bank upgraded its voice menu for telephone banking to realize clear voice menu design, simple ID verification and convenient self-service registration procedures. Self-help voice service of telephone banking was made clearer and more convenient and the self-service level of telephone banking was enhanced. 95588 telephone banking maintained its service at a high level. In the year, the telephone banking answered more than 95% of the calls, and over 90% of the calls were answered within 20 seconds.
• Mobile Banking
In fast response to new demands for mobile financial services, the Bank launched some new services, including mobile life customer-end, mobile online customer services, mobile banking donation and position marketing. The Bank advanced quality service project of mobile banking, optimized the handling procedures of mobile banking and simplified the operating steps to make the operation of mobile banking conform to users' habits to a larger extent and enhance customer experience of mobile banking. At the end of 2012, the number of mobile banking customers increased by 54.5% from the end of the previous year, and the trading volume increased by nearly 16 times.
• Self-service Banking
The Bank accelerated the installation of self-service equipment and extended its service channels to new business areas such as the commodity trading markets and major counties. By simplifying the processing procedures of selfservice terminals, the Bank increased the business varieties, set prices reasonably and intensified advertising on the functions of self-service equipment as well as the customer diversion and guidance for counter-based businesses to raise the efficiency of self-service equipment and diversion rate of counter-based businesses. At the end of 2012, the Bank owned 17,437 self-service banking outlets, representing an increase of 26.6% from the end of the previous year, and 70,202 ATMs, up 18.7%. The volume of ATM transactions amounted to RMB6,605.2 billion, up 35.8%.
In 2012, the Bank actively pushed forward the activities themed with "Satisfaction with ICBC", implemented service improvement strategy with thorough solutions. The bank mainly focused on improvement of counter service and resolution of prominent problems in order to build a long-term and effective working mechanism. As a result of these measures, the Bank improved its services in every aspect, increased its overall service level to a large extent and continuously optimized customers' experience.
The efficiency of customer services was rapidly raised and customer experience was continuously enhanced. The Bank continued to intensify its efforts in solving the problems of long queue for banking services. Through comprehensively promoting the service quality and queuing management system of outlets, imposing special supervision over key outlets and strengthening monitoring and analysis of the queuing problem, the Bank made great progress in solving the problem of long queue and significantly enhanced customer experience. By the end of the reporting period, the Bank conducted queuing monitoring over 13,364 outlets, which showed that the average waiting time of customers decreased by 37% compared with the peak value and the time for customers to wait for banking services in a long queue was effectively shortened.
Complaints from customers were significantly reduced and customer satisfaction level rose constantly. The Bank effectively increased the efficiency of customer complaint handling process, and raised the level of satisfaction in this regard by in-depth analysis and sorting out complaints and consultation data throughout the Bank, solving prominent problems and dealing with strong feedback from customers, reducing complaints from key branches, and urging response to specific complaints. During the reporting period, the number of customer complaints and repeated complaints decreased by 73% and 91%, respectively, and customer satisfaction rate in relation to complaint handling rose to 96%.
Customer service channels were further broadened and customer services were made more convenient. The Bank further optimized its network layout by establishing new outlets, relocation, redecoration, and optimization and adjustment of existing outlets. It further strengthened its service facilities accessible to disabled persons in outlets and improved the service standard for disabled persons. In addition, the Bank further intensified its efforts in self-service equipment installation and maintenance, promoted self-service card issuance machine and other new equipment and further enhanced the friendliness and attraction of self service, enabling the proportion of self-service trading volume to increase to 75% of the total trading volume of the Bank in the year. In the "Civilized and Normative Service of the Chinese Banking Industry" campaign in 2012, 116 outlets of the Bank were selected as the top 1000 institutions, ranking top in terms of number of selected outlets among peers in the banking industry for three consecutive years.
The business procedures were upgraded and business handling was smoother. The Bank advanced comprehensive reform and upgrading of business procedures as a permanent cure for service efficiency improvement its outlets, and it actively carried out cross-department, cross-institution, cross-platform and cross-business business procedurereform and upgrading. The 533 pressing problems affecting customer experience and teller experience which were reported as prominent issues by basic-level branches were solved in an all-round manner, notably improving customer experience. The Bank continued to deepen reform on centralized business processing, and the centralized handling proportion of counter-based corporate non-cash business arrived at 97%, which further demonstrated the effect of its concentrated business processing and enhanced the level of its business operation and service supporting.
The long-acting mechanism for service improvement is increasingly optimized and the monitoring on service quality became more timely and efficient. Based on new requirements of modern financial services and new changes in customer demands, the Bank strengthened the construction of its service policy regime, and established a service policy framework covering areas such as service standards, supervision and inspections, appraisal and assessment, thereby laying a solid institutional foundation for customer service improvement. The Bank further strengthened the supervision over and monitoring on the execution of service standards at operation outlets, organized and carried out off-site service inspections at operating outlets, promoted the application of service quality monitoring and evaluation system and queuing management system at operating outlets, conducted third-party survey on personal customer satisfaction, and figured out the customer satisfaction status across the Bank and major factors that infl uenced the customer satisfaction, so as to provide statistical support for its customer service improvement and consolidate the foundation for its customer service work.
[Internationalized and Diversified Operation]
Implementing internationalized and diversified operation strategy
In 2012, the Bank actively and steadily carried forward its internationalized and diversified operation strategy, serving the development of foreign trade and outbound investment of China. The global service network has taken shape, and the network layout of overseas institutions has been persistently improved, which further enriched and improved the comprehensive service network and increased the contribution of its internationalized and diversified subsidiaries to the Group's profits and their strategic synergy. Through strengthening cooperative interaction between domestic and overseas institutions and extending the globalized IT system, the Bank expanded its global product lines in an indepth fashion. Adhering to the principle of "one policy for one institution" and the combination of integration and differentiated management, the Bank improved the performance assessment mechanism and the authorization and credit extension management, constantly enhancing the operational capacity of overseas institutions. It also enhanced the cross-border, cross-market and cross-product-line risk prevention and control constantly, and the consolidated risk management of the Group was strengthened as well. Besides, the Bank proactively promoted the construction of the remuneration management system of the Group and reinforced the reserve of international talents.
Operating results for the reporting period
The operating and localization capacities of overseas institutions continued to improve. ICBC (Asia), ICBC (Macau), Standard Bank Argentina S.A. and Vientiane Branch have become mainstream banks in local markets, and there are many institutions with high profitability such as ICBC (Thai), ICBC (Indonesia), ICBC (Europe), Seoul Branch, ICBC (London) and New York Branch. At the end of the reporting period, total assets of overseas institutions (including overseas branches, subsidiaries and investments in Standard Bank) of the Bank were USD162,722 million, representing an increase of USD37,993 million or 30.5% from the end of the previous year, and they accounted for 5.8% of the Group's total assets, representing an increase of 0.7 percentage points. Total loans amounted to USD71,883 million, representing an increase of USD6,358 million or 9.7%, and total deposits were USD57,414 million, representing an increase of USD8.28 billion or 16.9%. Profit before tax during the reporting period was USD1,673 million, representing an increase of 21.8% compared with the previous year.
The Bank took new steps in expanding the network of overseas institutions. In America, the share delivery had been completed for the acquisition of 80% shares in The Bank of East Asia (U.S.A) N.A., which was renamed ICBC (U.S.A.). It is the first acquisition of controlling shares in banks made by a Chinese institution in the United States.
The share delivery had been completed for the acquisition of 80% shares in Standard Bank Argentina S.A., and the Bank became the first Chinese bank to acquire a controlling stake in an overseas mainstream commercial bank in local market. ICBC (Brazil) was formally established, and the establishment of ICBC (Peru) was approved by overseas regulatory authorities. In Europe, Warsaw Branch has successfully come into operation, and Lisbon Representative Office has started physical operation, extending the Bank's presence to 10 European countries. In Asia-Pacific Region, the applications for establishing Riyadh Branch and Kuwait Branch have been approved by the central banks of the host countries. The service network is increasingly improved in the Gulf region. The wholesale banking license of Singapore Branch has been upgraded to a Qualifying Full Bank (QFB) license, making Singapore Branch one of the first China-funded banks to hold this license. The application for the establishment of New Zealand subsidiary is under steady progress.
The capacity of ICBC in providing diversified services is improved steadily. The Bank established ICBC-AXA by an acquisition, further expanding its scope of business and providing customers with a wider range of financial services.
At the end of 2012, the Bank had 383 overseas institutions in 39 countries and regions, and established correspondent banking relationship with 1,630 overseas banking institutions in 138 countries and regions. A global service network covering six continents in Asia, Africa, Latin America, Europe, North America and Australia has been established.