Business Overview 2015
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 The Stock Exchange of Hong Kong Limited. Through its continuous endeavor and stable development, the Bank has developed into the top large listed bank 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 5,320 thousand corporate customers and 496 million personal customers. The Bank continued to promote reform, innovation and operation transformation. The Bank’s assets and liabilities business kept stable profitability during the structural adjustment. Retail banking, asset management and investment banking became important engines driving the profit growth, and the development of internet-based finance with leading edge gave impetus to the fundamental reform on operation and management models and service methods. The pattern of internationalized and diversified operation was further improved, covering 42 countries and regions, and overseas operations and comprehensive subsidiaries of fund, insurance and leasing contributed more to the Bank’s profit-making. In 2015, the Bank was named the “Best Emerging Markets Bank” by Euromoney, and ranked 1st place among the Top 1000 World Banks by the Banker and the Global 2000 listed by the US magazine Forbes for the third consecutive year.
As at the end of 2015, total assets of the Bank amounted to RMB22,209,780 million, RMB1,599,827 million or 7.8% higher than that at the end of the previous year. Total liabilities of the Bank amounted to RMB20,409,261 million, RMB1,336,612 million or 7.0% higher than that at the end of the previous year.
In 2015, the Bank realized a net profit of RMB277,720 million, up 0.5%. Return on average total assets stood at 1.30%, and return on weighted average equity was 17.1%. Core tier 1 capital adequacy ratio stood at 12.87%, tier 1 capital adequacy ratio 13.48%, and capital adequacy ratio 15.22%. Operating income amounted to RMB697,647 million, recording an increase of 5.9%. Specifically, net interest income was RMB507,867 million, growing by 2.9 %. Non-interest income reached RMB189,780 million, rising by 14.8%. Operating expenses amounted to RMB338,112 million, recording an increase of 13%, and cost-to-income ratio dropped by 1.26 percentage points to 25.49%.
At the end of 2015, the Bank’s corporate customers increased by 227 thousand over the end of the previous year to 5,321 thousand. According to statistics from PBC, the Bank had the largest balance of both corporate loans and corporate deposits in the banking industry.
Corporate Deposits and Loans
At the end of 2015, the balance of corporate loans reached RMB7,869,552 million, representing an increase of RMB256,960 million or 3.4% over the end of the previous year. The balance of corporate deposits hit RMB8,437,014
million, representing an increase of RMB399,881 million or 5.0%.
Small and Medium-Sized Enterprise Business
The Bank increased the number of micro and small enterprise banking centers to 154, thus boosting the growth and structural optimization of micro and small enterprise loans and also raising the business processing efficiency. Proactively utilizing Internet and big data technologies, the Bank promoted online financing products for micro and small enterprises including “Online Revolving Loan”, “Corporate Easy Loan”, “eLoan”, which enabled the financing for micro and small enterprises to be smaller in value but simple in procedures. At the end of December 2015, the balance of loans to micro and small enterprises stood at RMB1,883,208 million,representing an increase of 9.4% over the end of last year. The growth rate was faster than the average growth rate of domestic loans.
The Bank improved people’s livelihood related financial services and actively blazed new trails into interbank cooperation. The Bank kept on leading the market in the number of third-party custody customers and the amount of funds under custody for six straight 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 lead underwriter. The Bank was designated as one of the first banks to provide stock option settlement service and to work on the customs-treasury networking project. It was the first to launch the bond and foreign exchange agency clearing business system and the trans-regional traffic violation fines payment system, and also the first to try the national tax
funds monitoring system and cover the entire operating process on a pilot basis.
Settlement and Cash Management
The Bank innovatively launched new products such as “ICBC e Bill Payment” and cross-border cash pooling. The global cash management business was extended to over 70 countries and regions, and boasted more than 20 products including global account management, collection and payment management and liquidity management. At the end of 2015, the Bank maintained 6,397 thousand corporate settlement accounts, representing an increase of 4.4% over the end of the previous year, and the volume of settlements reached RMB2,264 trillion, up 19.3% over the previous year. The Bank maintained its leading position in the business size. The Bank’s cash management customers grew by 12.9% to 1,270 thousand and global cash management customers stood at 4,915, representing an increase of 12.4%.
International Settlement and Trade Finance
The Bank further sharpened the edges in cross-border remittance products by further optimizing the“ICBC Quick Remittance” product functions, and unveiled USD-denominated remittances under it. In 2015, domestic branches disbursed an aggregate of USD104 billion in international trade finance. International settlements registered USD2.6 trillion, of which USD950 billion were handled by overseas institutions.
Funds portfolio, industry fund and Public-Private-Partnership project capital fund, among other innovative equity financing products, were made debut officially, which enriched and improved the capital fund financing product system. The Bank actively promoted the cross-border buyout fund business. According to the Global M&A League Table: Thomson Reuters, the Bank ranked in the first place in terms of M&A deals per financial advisor in the Asia Pacific and China. The Bank actively expanded bond underwriting business and underwrote various debt financing instruments worth RMB1,152 billion as a lead manager throughout 2015. In 2015, the investment banking income reported RMB26,791 million.
At the end of 2015, personal financial assets totaled to RMB11.59 trillion, representing an increase of RMB1.09 trillion compared with the end of last year and making the Bank remain the largest holder of personal financial assets. Meanwhile, the Bank had 496 million personal customers, including 10.44 million personal loan customers, representing an increase of 31.51 million and 0.80 million from the end of the previous year respectively.
At the end of 2015, the balance of the Bank’s personal deposits amounted to RMB7,601,114 million, representing an increase of RMB412,507 million or 5.7% from the end of the previous year, of which, personal demand deposits and personal time deposits added by 7.5% and 4.4% respectively.
At the end of 2015, the balance of the Bank’s personal loans amounted to RMB3,541,862 million, representing an increase of RMB478,397 million or 15.6% from the end of the previous year. According to the PBC data, the Bank remained an industry leader in terms of personal loan balance.
ICBC Private Banking Center (Middle East) commenced business, making the Bank the first Chinese-funded bank offering private banking business in the Middle East. Private banking service network was formed across 22 countries
and regions and capable of offering individualized cross-border advisory and consultancy service for customers. At the end of 2015, the Bank managed RMB1.06 trillion assets for 62.4 thousand private banking customers. The managed assets increased by RMB325.9 billion or 44.3% compared with the previous year end and the customer size expanded by 19.3 thousand or 44.8%.
Bank Card Business
At the end of 2015, the Bank issued 750 million cards, representing an increment of 82.87 million from the end of the previous year. In 2015, bank card purchase volume increased by 18.0% compared with last year to RMB8,841.6 billion.
Credit Card Business
Consumer Credit Finance Center was set up as an initiative to develop a new model of standardized, fully online and credit-based financial operation that seeks for collaboration between credit card and consumer credit loan, and to
grant credit line on a dynamic and customized basis and monitor risks in a real-time fashion. In 2015, the Bank outperformed its peers in terms of number of credit cards issued, purchase volume and overdraft balance.
Debit Card Business
The Bank rolled out many products featured innovative payment means of debit cards such as using E-cash. Such products consists of Small-value Payment Free of Password Debit Cards, 360eID Chip Card Pasting and Payment and Debit Cards’ HCE Cloud Payment.
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.
Wealth Management Services
Wealth management products were further transformed to net-worth products with more reasonable maturity, the yields of which could better reflect the market status. In overseas and offshore markets, the Bank expanded the services for cross-border wealth management products in free trade zones, European UCITS fund and asset management of foreign central banks in order to enhance the global allocation and asset management capabilities. At the end of 2015, the Bank’s stock wealth management products increased by 32.0% compared with the previous year end to RMB2,616,598 million, remaining the largest in the industry.
Asset Custody Services
The Bank developed a sound asset custody product and service system and 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. At the end of 2015, total net value of assets under the Bank’s custody increased by 97.4% from the previous year end to RMB11.5 trillion.
At the end of 2015, the pension funds under the Bank’s trusteeship amounted to RMB82.7 billion; the Bank managed 15.23 million individual pension accounts, and the pension funds under the Bank’s custody totaled RMB439.7 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.
Precious Metal Business
To echo the changes in market demands, the Bank developed a variety of new brands on assorted themes and introduced a slew of products, e.g. Chinese Zodiac Coins and Panda Gold and Silver Coins, under agent sales. In 2015, the sum of precious metal business transactions was RMB1.25 trillion. The Bank cleared RMB388.4 billion on behalf of the Shanghai Gold Exchange, ranking No. 1.
Franchise Treasury Business
The Bank expanded the coverage of foreign exchange settlement and sales outlets and enriched the convertible currencies. Foreign exchange transaction business in respect of the currencies of 80 emerging countries was launched
for corporate clients. The volume of foreign exchange settlement and sales together with franchise foreign exchange trading stood at USD726,500 million.
Asset Securitization Business
The Bank issued two tranches of credit assets backed securities on 10 February 2015 and 17 September 2015, respectively. Corporate loans were the underlying assets of this project in which the Bank served as originator and
lending services provider.
By attracting new customers, enhancing refined management level, creating innovative fund marketing models, expanding electronic channels and fund product lines, the Bank increased the funds under agency sales to RMB1,037.9 billion. Widening the electronic distribution channels such as self-service terminals and Internet banking, the Bank sold RMB166.8 billion worth of insurance products on an agency basis, increasing by 62.4%.
In 2015, the Bank flexibly arranged for the investment progress and focus, timely adjusted investment and trading strategies, and took different measures to increase the profitability of treasury operations in tandem with the financial market trends.
Money Market Activities
In 2015, domestic trading amount in the interbank market was RMB52.26 trillion, of which lending amounted to RMB50.36 trillion. The transaction volume in foreign exchange money markets recorded USD156.6 billion.
In 2015, the transaction volume of RMB bonds and foreign currency bonds in trading book scored RMB588.9 billion and USD10.1 billion respectively.
The Bank made innovations in the liability models. A variety of liability approaches, e.g. issuing CDs, were taken to boost the support of diversified liabilities to the growth of asset business.
Riding on the three platforms and the new mechanism of internetbased
finance marketing services, the Bank’s financing, payment, investment and wealth management product lines all grew quickly in 2015.
ICBC Mall.The business coverage of ICBC Mall included B2C, B2B and B2G (enterprise and government procurement e-commerce platform), the goods and services available on it covered daily consumer goods, financial products, as well as property, tourism, auto, education and centralized procurement sectors. In 2015, ICBC Mall achieved an accumulative transaction amount of over RMB800 billion and had more than 30 million registered customers.
ICBC Link. ICBC Link aims at becoming an interactive platform for instant information exchange, business consultancy, communication and sharing between the Bank and its customers, inside the Bank and among the customers, and developing a new financial service model featuring socialized finance and interactive marketing. In 2015, the Bank actively facilitated ICBC
Link’s function improvement, application and organization setup, as well as internal promotion and socialized marketing.
ICBC Mobile. The Bank went all out to promote the construction of ICBC Mobile’s open-ended network banking, by highlighting the open, intelligent and individualized concepts and comprehensively upgrading its brand, functions and services. In 2015, users of ICBC Mobile application numbered to 190 million.
Financing Product Line. At the end of 2015, online financing balance exceeded RMB500 billion. Easy Loan, an unsecured loan product based on the online & offline direct consumption of customers, had 4.5 million customers and a balance of more than RMB210 billion. The online revolving loan product designed to address the short-term, frequent and urgent financing needs of micro and small-sized enterprises, has cumulatively provided loans of RMB340 billion in 2015. The Bank promoted the personal self-service pledge loan which accumulated to RMB133.5 billion in 2015, and established the Consumer Credit Finance Center to provide purely unsecured and entirely online personal consumption credit business without mortgage or guarantee.
Payment Product Line. “ICBC e-Payment” featuring small amount and convenience saw its customers doubled compared with a year ago and the full-year transaction amount surpassed RMB 210 billion. The online POS cashier product had more than 10 thousand merchants with a transaction amount above RMB100 billion.
Investment and Wealth Management Product Line. The mobile terminal of “ICBC e Investment” went alive as an investment and trading platform for individual investors, and it dealt with many product lines such as paper precious metals and paper crude oil with a transaction amount exceeding RMB330 billion in 2015.
The Bank energetically promoted structural adjustment of offline channels and transformation of business models. At the end of 2015, the Bank had 16,732 physical outlets, less than the end of last year; it maintained 29,043 self-service banking facilities, up 12.3% from the end of last year; the number of ATMs was 99,789, an increase of 8.1%, and the transaction volume reached RMB12,666.8 billion, expanding by 16.7%.
The Bank accelerated the strategic layout of online channels and functional improvement. It drove ahead the development of mobile channels vigorously,
with the launching of ICBC Mobile application and comprehensive upgrade of mobile banking. The Bank also energetically promoted the open and intelligent reconstruction of personal online banking system.The E-banking transaction amount hit RMB592 trillion, an increase of 30% over the previous year; the number of E-banking transactions accounted for 90.2% of total transactions of the Bank, rising by 4.2 percentage points from the last year. At the end of 2015, personal and corporate E-banking users grew by 11.6% and 12.5% respectively.
The Bank advanced the development of a service system with integrated online and offline channels. It built and enriched new channel entrances and realized full coverage of WIFI services in domestic outlets, so that the customers of the Bank and other banks can access to the Bank’s financial products at these outlets.
Internationalized and Diversified Operation
In 2015, the Bank’s global network layout paralleled channel building in a steady way. Riyadh Branch, Yangon Branch and ICBC (Mexico) were established. The Bank acquired 60% shares of Standard Bank PLC, thus officially stepping into global commodities and money market trading business. In addition, the Bank also acquired shares of Tekstilbank, thereby becoming the first Chinese-funded bank that has established an operating institution in Turkey. ICBC (Thai) and ICBC (Argentina) were successively authorized as the RMB clearing bank, thus increasing the number of the Bank’s overseas RMB clearing banks with authorization from PBC to six. The Bank became the first Chinese-funded bank that is able to offer around-the-clock RMB clearing services in Asia, Europe, and the Americas. As at the end of 2015, the Bank established 404 institutions in 42 countries and regions and indirectly covered 20 African countries as a shareholder of Standard Bank Group. In particular, the Bank maintained 123 institutions in 18 countries and regions along the “One Belt and One Road”. The Bank also established correspondent banking relationships with 1,611 overseas banking institutions in 147 countries and regions. The net profits of overseas institutions (other than the newly acquired institutions) increased by 12.2% to USD3.166 billion. Comprehensive subsidiaries engaged in funds, insurance and leasing also seized the opportunity and realized a rapid profit increase of 55.4% in terms of total net profits, making greater profit contributions to the Group. ICBC Leasing actively served the “Belt and Road” initiative and international capacity cooperation.At the end of 2015, ICBC Leasing recorded total assets of RMB298.7 billion. ICBC-AXA’s total assets exceeded RMB66.5 billion and maintained its leading position among its peers. The size of the assets under the management of ICBC Credit Suisse Asset Management amounted to over RMB950 billion, representing an increase of 62%.
IT-based Banking Development
The Bank deepened and expanded the application of big data technology, promoted the unified management and application service of data warehouse and the Group’s database, continued to diversify the basis of data warehouse for structural data and database for non-structural data, which improved the data standards and quality. It strengthened the capability of value-added data application, established an analyst platform and reinforced data mining and analysis in some crucial business fields, e.g. customer service, precision marketing and risk prevention and control.
The Bank carried forward the transformation of IT architecture. Fully capitalizing on such new technologies as cloud computing and big data processing, the Bank established a new information technology framework that meets future business growth requirement, and also set up a slew of technical architectures including API open platform, streaming data processing platform and infrastructure cloud platform.
The Bank created new ways of doing business on all fronts. It built a product R&D and market promotion mechanism meeting the characteristics of internet-based finance and established a unified, efficient system application platform. Under the Internet Financing Center, the Bank developed an online financing product system and made debut the self-service pledge loan for individuals, among other innovative products. Besides, the optimization and transformation of operational procedures for outlets’ composite services at counter were continued. More efforts were made in R&D of anti-fraud functions concerning such specialized transactions as credit card and E-banking. The Bank improved the financial services in people’s livelihood sectors, for instance, it expanded the functions of bank-hospital cooperative business. Furthermore,
the Bank advanced the system building in respect of international and diversified operations with FOVA smoothly rolled out in ICBC (USA), the overall switch from FOVA’s host system to the platform-based core system in Bank ICBC (JSC) and the development of new-generation core insurance business system for individuals in ICBC-AXA.
The Bank continued to improve the continuous operating capability of information system services and the development level of infrastructure, in addition to strengthened construction of the information safety prevention system. Based on the architecture of “three centers in two places”, operations were put under integrated management, enabling them to be mutually taken over. The information safety protection system covering the Group-wide hardware and software was improved, which was capable of taking centralized management concerning real-time monitoring, treatment and safety analysis of various outside attacks. The Bank was the first Chinese bank to use the quantum communication technology, and it also completed the change of native cipher algorithm in financial IC card and mobile payment system, electronic authentication system and personal Internet banking system.
In 2015, the Bank obtained 47 patents from the State Intellectual Property Office, and the total number of patents owned by the Bank increased to 404.
In 2015, the Bank further improved the enterprise risk management system, pushed ahead with the implementation of regulatory requirements on systemically important banks, and continuously improved risk management technologies and methods. The level of its enterprise risk management was further enhanced. It reinforced consolidated risk management at the Group level, with the focus on risk management of non-banking subsidiaries, reinforced country risk management and strengthened country risk monitoring and limit management of key countries and regions. It also enhanced the market risk management through proactively classifying the market risk management of overseas institutions, carrying out standard product control and bolstering market risk management of asset management business. Additionally, it propelled the implementation of advanced capital management approaches, improved the measurement system concerning credit risk, market risk and operational risk and continued to promote monitoring, validation and management application of the risk measurement system.
Taking “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 is dedicated to realizing sustainable development of economy, environment and society and maximization of comprehensive value based on the general appeal of all stakeholders in social development. The Bank gained extensive social recognition by its good performance in social responsibility fulfillment, and won various awards, including “Best Social Responsibility Financial Institution Award”, “Most Respectable Enterprise in China” and “Best Practice Award for Caring for Climate Change and Environment Protection”.