In 2010, in the midst of the most difficult financial conditions, Industrial and Commercial Bank of China Limited ("ICBC") took active measures to align with the global financial regulatory reform and merge into China's economic transformation. The priority was to speed up business re-orientation and stay focus on credit structure adjustment and development changes. ICBC sustained its market position as the largest public bank in the world by market value, customer deposit and profit, with a base of top-quality customers, diversified business structure, strong innovation capacity and market competitiveness.
［Business Review］At the end of the year, ICBC had 397,339 employees under payroll. ICBC provided a wide range of financial products and services to 4.12 million corporate clients and 259 million individual customers through 16,227 outlets across China, 203 overseas subsidiaries and a global network of more than 1,562 correspondent banks as well as Internet Banking, Telephone Banking and self-service banking. ICBC established strong presence by its commercial banking operation and rapid expansion to markets worldwide. ICBC held the top slots in the country in many business areas of commercial banking.
At the end of 2010, total assets reached RMB 13,458.622 billion, representing an increase of RMB 1,673.569 billion, or 14.2% over the end of previous year; Total liabilities reached RMB 12,636.965 billion, up RMB 1,530.846 billion, or 13.8% from a year earlier. ICBC was the largest listed bank in the world with a market capitalization of USD 233.5 billion. Having a 28.4% increase against previous year in net profit to RMB 166.025 billion in 2010, ICBC defended its position as the world's most profitable bank, up by 12.0 percentage points from a year earlier. Return on average total assets and return on weighted average equity on par with the international standard, were at 1.32% and 22.79% respectively. Earnings per share rose RMB 0.10 from a year earlier to RMB 0.48. Bad loan balance and ratio both declined in its eleventh year. Ratio of non-performing loans fell to 1.08 percent. ICBC scaled up its capital strength and sustainable development by securing capital adequacy ratio and core capital adequacy at 12.27% and 9.97% respectively, as a result of optimized business structure, conclusion of re-financing and applicable increase on the profit provision ratio.
［Corporate Banking］ In 2010, the Bank moved faster in business restructuring and advanced the transformation of corporate banking in response to the changes in the macro environment. To maintain its edge in the market, ICBC took a rational approach in the allocation of its financial resources and optimized its credit structure. In order to meet the diversified financing needs of customers, ICBC exerted concrete steps to increase synergy between commercial banking and investment banking and advance its services in investment and financing advisory, underwriting of debt instruments and syndicated loan arrangement. The Bank continued to push ahead its cash management, asset custody, pension fund and corporate wealth management services, and optimized the structure of its corporate banking business. ICBC supported the "Go Global" projects of Chinese enterprises by expanding its services in overseas, cross-border RMB settlement and enhancing its global service capability. Under the reform of multi-tier customer marketing system, ICBC established a differentiated customer service system to improve the quality of its customer service. ICBC has been named "Best Corporate Bank in China" by the UK Financial Times. At the end of 2010, the Bank had 4.12 million corporate customers, representing an increase of 510,000 from the end of the previous year while 102,000 customers had loan balances with the Bank, or an increase of 18,000 customers.
Corporate Deposits and Loans In conformity with the national macro-control policy, the Bank controlled total volume of lending and lending to target recipients at the right pace, improved its credit structure in a bid to achieve stable and healthy growth of loan business. Balance of all corporate loans in domestic branches at the end of the year rose RMB 742.557 billion, or 18.8%, to RMB 4,700.343 billion. The Bank strengthened marketing efforts towards supply chain customers and customer bases in urban circles as well as to absorb and aggregate customer funds. At the end of 2010, the balance of domestic corporate deposits amounted to RMB 5,471.309 billion, representing an increase of RMB 682.819 billion or 14.3% from the end of the previous year. PBOC data shows that, at the end of 2010, ICBC ranked No. 1 among the peers in terms of both corporate loans and corporate deposits, with a market share of 12.2% and 12.8% respectively.
SME BankingIn an effort to enhance the level of specialized service, product offering and coverage of special outlets, over 1,200 such outlets have been set up dedicated to serving small enterprises. ICBC has been named "Excellent SME Service Organization" by China Association of Small & Medium Enterprises (CASME) and one of the "Top 10 Commercial Banks for the Support to Small and Medium Enterprises" for two consecutive years by the Organizing Committee of the Annual Meeting of Chinese Businessmen. At the end of 2010, 63,081 small business customers had loan balance with the Bank, representing an increase of 18,838 from the end of the previous year.
Institutional BankingICBC launched new products in collaboration with many securities firms, such as arranging schedule for the opening of third-party depository account. Business has been proceeded at an impressive pace, with the number of customers and volume of customer fund ranking at the top in the banking industry. The new Bank-Bank platform helped extend partnership with other domestic banks, increasing such number to 109. ICBC also strengthened its bank-insurance service by increasing the volume of insurance agency business and cooperation in other fields of asset custody, cash management, bank card and others. ICBC Bank strengthened its relation with its government customers and reinforced top position in the market in terms of fiscal collection and disbursement services and the number of business cards issued for budgetary units.
Settlement and Cash ManagementServices for settlement bonus points and settlement package were promoted to increase brand awareness of "Caizhi Account". As third-party payment market taking off, ICBC seized the opportunity to promote payment service on behalf of non-financial institutions. At the end of 2010, 5.05 million corporate settlement accounts were maintained with the Bank, representing an increase of 650,000 from the end of the previous year. The transaction volume of corporate RMB settlement increased by 30.2% to RMB 870 trillion during the year, enabling the Bank to maintain its position as an industry leader. ICBC leveraged its global cash management service to cement its top spot and for the fourth year running and proving itself to be the "Best Cash Management Bank in China" by The Asset and Finance Asia, and the "Achievement Award for Cash Management in China" by Asian Banker. At the end of 2010, the Bank had 508,000 cash management customers, representing an increase of 77.0% over the end of previous year.
Investment BankingICBC gathered its pace on the restructuring of investment banking products to drive rapid growth of its investment banking arm. Management on equity investment fund was an innovative service for enterprises to expand equity financing channel. ICBC also widened its bond underwriting business and underwrote debt instruments worth RMB 207 billion for non-financial enterprises in 2010, ranking first in China. Given the ever-increasing awareness of its investment banking brand, ICBC was awarded the "Best Bank in Investment Banking" by the Securities Times once again. In 2010, income generated from investment banking rose 23.7% from a year earlier to RMB15.506 billion.
International Settlement and Trade FinanceICBC centralized the trade processing for 53 domestic and overseas subsidiaries. With newly established sub-centers in Hefei and Chengdu, the Bank enhanced the capacity for intensive documentary bill processing and trade finance operation. ICBC stepped up its cross-border RMB business. ICBC has set up a global RMB clearing network among the peers with overseas subsidiaries and agency banks from 31 countries/regions opening domestic RMB clearing accounts in the Bank. In 2010, domestic branches disbursed an aggregate of RMB 974.7 billion in trade facility, an increase of 43.4% compared to the previous year, of which domestic trade financing increased by 66.8% to RMB 624.4 billion. International settlements handled by domestic branches rose 43.4% to a tune of USD 782.7 billion, capturing larger market share.
Asset CustodyInsurance assets under ICBC custody went to nearly RMB 1 trillion, jacking up ICBC's market share to 39%. Global custody service moved on steadily. ICBC retained its place at the top of Chinese banks in the delivery of custodian services to QFII customers and captured leading market shares in terms of the scale of QDII assets under custody. New asset custody service "Anxin Account" as well as emerging custody services such as wealth management banking products, asset management plan for securities firms and custody of equity investment funds were launched in a bid to optimize the structure of custody business. ICBC was recognized in consecutive years as "The Best Custodian Bank in China" by many renowned financial publications, including the Global Custodian, Global Finance and The Asset. At the end of 2010, the total net value of asset under ICBC's custody reached RMB 2,875.7 billion, representing an increase of 59.2% from the end of the previous year.
Pension ServiceThe Bank boosted its market expansion effort by leveraging its competitive advantages. The "Ruyi Pension III" corporate annuity plan was launched to expand product offering and increase brand influence. A management system of pension fund was rolled out to enhance the service and management level of the Bank. By year-end 2010, ICBC provided pension management services for 22,790 enterprises, representing an increase of 4,470 from the end of the previous year. Pension funds under ICBC's trusteeship amounted to RMB 42.7 billion. The Bank managed 9.12 million individual pension accounts and RMB148.7 billion of pension funds was under the custody of ICBC.
Precious Metal Business An array of precious metal products were launched under four product lines encompassing physical, trading, financing and wealth management. ICBC gold accrual service was actively promoted in parallel with the launch of many new services, the trading of silver via account, the deferred settlement of silver on behalf of Shanghai Gold Exchange. The Bank also launched gold leasing service, loan against pledge of gold, "Ruyi Gold" Compounded Wealth Management Product - first wealth management product that linked with physical precious metal. In 2010, total turnover of precious metal reached 24,400 tons which was 23.6-fold more than 2009's. In the year, ICBC cleared RMB 128.8 billion on behalf of Shanghai Gold Exchange, maintaining its leading position among peers.
Corporate Wealth ManagementInterest accrual by periods with increasing return and redeemable fixed-income were newly launched wealth management products. ICBC expanded capital market investment products including rights to earnings from stock investment and structured securities investment wealth management products for generating more returns from wealth management products. "Ruyi Life" pension were introduced to give a broad spectrum of wealth management products. ICBC has been conferred the title of the "Best Asset Management Team" from the 21st Century Business Herald. ICBC sold corporate wealth management products to a total of RMB 2,165.5 billion in 2010, representing an increase of 20.6% as compared with the previous year.
［Personal Banking］In 2010, ICBC oversaw a transformation in personal banking business and executed the "Strong Personal Banking" strategy to defend its market dominance as the No. 1 retail bank in China. ICBC tapped emerging markets represented by merchandise markets to expand the business scope of personal banking. ICBC Merchant Friend Club and other new types of marketing platforms were set up to innovatively widen customer base and explore new model of customer relationship. The Bank pushed ahead savings deposits and wealth management service to consolidate its position in these two business fields and increase the total financial assets of personal customers. ICBC focused on bank card business and private banking by dint of its competitive advantages in financial resources. Star-class service scheme for personal customer was implemented to win top customers and enhance the standard of customer services. ICBC has been named "Best Retail Bank in China" by Asian Banker. At the end of 2010, the Bank had 259 million personal customers, including 6.85 million personal loan customers. According to statistics from PBOC for the period ending 2010, ICBC topped the league table both in terms of savings deposits and personal loans, with a market share of 17.1% and 14.5% respectively.
Savings Deposit ICBC expanded both its number of customer groups as well as its sources of savings deposits under new platforms such as ICBC Merchant Friend Club and Celebrity Wealth Management Club. To increase corporate group customers and batch customers, ICBC started joint marketing on corporate banking through payroll service. At the end of 2010, ICBC's balance in domestic savings deposits amounted to RMB 5,243.657 billion, up RMB 583.225 billion or 12.5% from the end of the previous year. Out of which demand savings deposits increased by RMB 444.477 billion or 24.6% and time savings deposits increased by RMB 138.748 billion or 4.9%.
Personal LoanICBC embarked growth area in extending consumer loans to individuals for personal or household use. The Bank also provided business loans to merchants in commercial trade clusters and industry clusters. Small personal loans were launched to bolster county-level economic development. ICBC accelerated product innovation by adding "Card Loan Link" (personal revolving loan) and "Online Loan Link" (online financing) to the offering of personal loan products. At the end of 2010, domestic personal loans amounted to RMB1,633.192 billion, rising RMB 426.342 billion or 35.3% from the end of the previous year, of which, personal consumer loans increased by RMB109.93 billion or 69.7%.
Personal Wealth Management ICBC successively launched wealth management products in special seasons of Mid-Autumn Festival or National Day, or convertible bond as a result of accelerated innovation on wealth management products. Greater efforts were also made to promote guaranteed insurance products with payments by installments. ICBC sold RMB 88.5 billion worth of personal insurance products in the year, representing an increase of 22.2% compared with the previous year. ICBC led the peers in selling RMB 356.1 billion worth of open-ended funds. The Bank remained first-place in the ranking after selling RMB 71.5 billion worth of treasury bonds. In 2010, sales of personal wealth management products in the country totalled RMB 2,373.9 billion, representing an increase of 55.4% from a year earlier, of which sales of personal banking wealth management products surged 109.4% to RMB1,857.7 billion.
Private BankingICBC provided private banking services to high-net-worth customers with RMB 8 million (or above) of personal financial assets, covering financial management, asset management, consulting, private wealth accumulation and cross-border finance. ICBC private banking services were available in China's major economic regions under a network of ten sub-departments in Beijing, Shanghai, Guangzhou and several other cities. ICBC was awarded the "Best Private Bank in China" by Euromoney and "Outstanding Chinese-Funded Private Banking Brand of the Year" by the 21st Century Business Herald. By year-end 2010, the Bank secured over 18,000 private banking customers and managed assets worth RMB 354.3 billion.
［Bank Card Business］ In bank card business, ICBC boosted market expansion, product innovation and service upgrade in the year and further consolidated its leading position in the banking industry. At the end of 2010, ICBC has issued 350 million bank cards, an increase of 65.6 million cards from the end of the previous year. Cardholder expenditure volume in the year rose 49.5% from a year earlier to RMB 2,239.5 billion. Income from bank card business amounted to RMB 13.687 billion, representing an increase of 45.5%.
Credit Card Business ICBC started the campaign on marketing credit cards to star-class customers and promotion of transport cards, co-branded cards to expand card issuance volume. ICBC was the first bank in the country to offer credit card online application service in a move to issue credit cards via more channels and enhance the efficiency. The service capacity and standard were vastly improved driven by the 34 new VIP customer service centers, special hotline for platinum card holders and corporate groups. ICBC was recognized as the "Trusted Brand — Credit Card Issuing Bank: Gold (China)" by Reader's Digest of the United States for the second year running. At the end of 2010, 63.66 million credit cards were issued, representing an increase of 11.65 million from the end of the previous year. Annual cardholder expenditure volume stood at RMB 638.3 billion, rising 42.2% from the previous year. The balance of domestic credit card overdraft went up RMB 54.685 billion, or 148.3% to RMB 91.561 billion. ICBC maintained the leading edge in terms of card issuance volume, cardholder expenditure volume and overdraft volume.
Debit Card Business An array of thematic cards highlighted ICBC's focus on innovation in debit card products, namely, ICBC Merchant Friend Card, Yang Lan • Money Link Card, Smile Angel Foundation Money Link Card and Taobao Money Link Card as well as co-branded cards, such as telecom card and provident fund card, adding new members to the Money Link product line and expanding card issuance volume. To enhance product competitiveness, ICBC brought into play its technological advances in chip cards to issue different types of chip debit cards such as Asian Games Money Link Card, Baby Growth Card. A range of thematic and regional marketing activities were launched to encourage cardholders to use card for spending and increase expenditure volume. By year-end 2010, 291 million debit cards were issued, representing an increase of 53.95 million from the end of the previous year. Annual cardholder expenditure volume has soared 52.7% to RMB 1,601.2 billion.
［Electronic Banking］ ICBC pursued the bank-wide development strategy and launched an integrated electronic banking platform encompassing transaction, marketing and services under one roof. In 2010, ICBC introduced 49 new products and streamlined 155 existing product functions to reinforce the core competence of Electronic Banking and improve the level of customer services. In 2010, the transaction volume of E-banking increased by 37.2% when compared to the previous year. Electronic Banking transactions accounted for 59.1% of all ICBC transactions, a jump of 9.0 percentage points from the previous year. ICBC Electronic Banking further demonstrated its role as one major transaction channel.
Internet Banking ICBC rolled out cross-border foreign exchange remittance in Corporate Internet Banking, online financial analysis system in Personal Internet Banking, as well as global account management service for both Corporate and Personal Internet Banking customers. In a bid to enrich Internet Banking products, ICBC embraced innovation in asset business of Internet Banking and added such new features as supply chain financial platform and Online Loan Link. Internet Banking services were opened in 15 overseas subsidiaries as an effort to speed up the launch. At the end of 2010 in Corporate Internet Banking and Personal Internet Banking, ICBC has registered an increase of online users of 26.5% and 27.7% from the end of the previous year respectively, and annual transaction turnover rose 46.6% and 60.1% respectively. ICBC was named the "Best Internet Banking in China" by Asian Banker and the "Best Consumer Internet Bank in China" by Global Finance.
Telephone BankingICBC has established an integrated telephone banking system under improved operation and management. Call desks were assigned to work at different locations throughout the Bank. ICBC expanded its 95588 service channel with the launch of SMS customer service to effectively divert the workload of call desks. Electronic Banking Center (Hefei) and Electronic Banking Center (Shijiazhuang) were put into operation as a move to further enhance the service level. The set up of overseas telephone banking centers enabled the opening of telephone banking services in ICBC Canada, ICBC Indonesia and Frankfurt Branch.
Mobile BankingICBC aligned with the mobile development trends and took strong impetus on the innovation in mobile financial products. Mobile Banking wealth management, loan and remittance to overseas VISA cards were newly launched functions to enrich the offering of Mobile Banking products. Innovation such as mobile portal, electronic map helped extend mobile marketing services. Growth of Mobile Banking customers and transaction volume remained impressive.
Self-service Banking Off-premise deployment of ATMs, transaction flow of self-service terminals, more functions for self-service transactions, utilization efficiency of self-service devices were some of the considerations taken. At the end of 2010, ICBC owned 11,414 self-service banking outlets, representing an increase of 30.8% from the end of the previous year, and 42,868 ATMs, up 25.8%. Turnover of ATM transactions amounted to RMB 3,375.3 billion, up 64.9%.
［International Operation］In 2010, ICBC made major inroads in gaining global footprint under the full implementation of international strategy. The Bank seized the favorable opportunity in the post-financial crisis era to extend presence in both emerging and developed markets through new branches or acquisition. ICBC Hanoi Branch, ICBC Malaysia and ICBC Abu Dhabi Branch commenced business successively. The acquisitions of The Bank of East Asia (Canada) and ACL Bank Public Company Limited in Thailand were completed and the two banks were renamed to Industrial and Commercial Bank of China (Canada) and Industrial and Commercial Bank of China (Thai) Public Company Limited, respectively. The privatization of ICBC Asia was concluded as scheduled. ICBC acquired Fortis Securities' Prime Dealer Services Unit (US) to form Industrial and Commercial Bank of China Financial Services LLC. ICBC signed the legal agreement concerning the purchase of AXA-Minmetals Assurance Co., Ltd. Paris Branch, Amsterdam Branch, Brussels Branch, Milan Branch, Madrid Branch and subsidiaries in Pakistan (Karachi Branch, Islamabad Branch) have obtained the approval from overseas regulatory bodies. The expansion of tier-2 branch network and localization in countries/regions including South Korea, Indonesia, Hong Kong and Macau were moving at a faster tempo.
At the end of 2010, ICBC had a global network comprising 203 overseas subsidiaries in 28 countries/regions, including 21 overseas branches and their subsidiaries, 181 overseas holding companies and their subsidiaries; and 1,453 correspondent banks in 132 countries/regions. With diversified channels, well-defined hierarchy, reasonable positioning and efficient operation, a global financial service network spreading over five continents of Asia, Africa, Europe, America and Australia has been basically in place. Total assets of ICBC overseas institutions (overseas branches, overseas subsidiaries, investments in Standard Bank) were USD 75.727 billion, representing an increase of USD 23.521 billion, or 45.1%, from the end of previous year. Profit before tax surged 37.2% from a year earlier to reach USD 1.185 billion. All overseas branches and subsidiaries, including those newly established, posted a profit.
［Advanced IT］ ICBC embraced advanced information technology to continuously sharpen own core competence. In 2010, ICBC's13 technological achievements were presented PBOC Award for Banking Technology Advancement and won the "2010 WIPO Award for Innovative Enterprises" jointly presented by World Intellectual Property Organization (WIPO) and National Copyright Administration of the People's Republic of China. Backed by continuous innovation, R&D and optimization on application products, ICBC set up a uniform customer service and support management system across the Bank and a uniform customer assessment system. The Bank expanded the multi-application platform of chip cards for the launch of mobile chip cards for payment by mobile phone and ETC cards for payment of highway toll. Other implementations included an integrated Telephone Banking system, unified treasury management framework (in home and foreign currency) under the "full-amount concentration, individual pricing" model, the independently-developed risk management systems including advanced measurement approach for operational risk and internal modeling approach for market risk, the launch of FOVA in 25 overseas branches, the opening of cross-border remittance service (between ICBC accounts) in the market in July 2010, the pilot in opening the service of global personal account management in ICBC Macau and Shenzhen Branch for customers to make enquiry on global accounts, transfer or remittance through the counter or Electronic Banking. In 2010, ICBC has created 449 new products, adding the total number of products to 2,815, a 19% increase from the end of the previous year. In 2010, 24 patents of the Bank were authorized by the State Intellectual Property Office, increasing the total number of patents owned by the Bank to 115.
［Social Responsibility］ICBC remains committed to pursuing organic unification of economic and social responsibilities, establishing the image of a large responsible bank in the aspects of supporting economic and social development, and the delivery of best-quality financial services. The Bank has always followed its business philosophy of "customer-oriented, services creating value" to beef up its brand, and display its excellent brand image on "final examination" - major international events such as the World Expo, Asian Games. In 2010, ICBC implemented the "Improvement on Ten Services" program and launched "Service Value Year" event. The concern was on customer experience and evaluation, IT innovation, product upgrade, channel set-up and business process optimization. One hundred and thirty eight ICBC outlets were included in the "1000 Best Model Chinese Banking Units in Services in 2010", ranking first-placed among peers.
Socially ICBC is committed to "Origin from the community, give back to the community, serve the community" and sponsored philanthropic causes with continuous increase in donation. In 2010, immediately after Qinghai Yushu earthquake, Gansu Zhouqu mudslide, ICBC donated more than RMB 50 million in kind and cash as a timely source of help. The Bank opened "green channel" in the first instance to provide fast, convenient and all-inclusive financial services for the relief work. All loans were channeled to support the reconstruction of Sichuan Wenchuan after the earthquake. A total of RMB 48.6 billion in loans for relief work and reconstruction has been released. ICBC continued to support many charity initiatives as "green" poverty-alleviation programs, subsidized education, concerns to children of farmers and migrant workers, financial knowledge awareness. A total of RMB 62.52 million has been donated to support these initiatives.
［International Accolades］ICBC's excellence in business won the recognition from home and abroad. In 2010, ICBC received a total of 189 awards including "Bank of the Year (China)", "Bank of the Year (Asia)", "Most Respectable Bank in China" presented by flagship publications and intermediary organizations in China and overseas such as Euromoney, Global Finance, Asian Banker, Financial Times. International companies engaged in brand study gave high remarks to ICBC. In the Millward Brown Optimor's 2010 ranking of Top 100 Most Valuable Brands, ICBC ranked eleventh and remained as No.1 of all financial institutions for the second year running. ICBC was the fifth largest on the US 2010 Forbes Global 2000 measuring from four metrics: sales, profits, assets and market value.