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ICBC Enhances the Quality of Business Development While Maintaining Stability in 2023
 
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On March 27, 2024, Industrial and Commercial Bank of China (stock code SH: 601398; HK: 1398) announced its annual results for 2023. In 2023, ICBC managed to deliver stable, higher-quality performance with sound momentum while serving the high-quality economic and social development, and made headway in building a world-class and modern financial enterprise.

ICBC kept its core operating indicators stable under the International Financial Reporting Standards (IFRS), striking a balance between being “Strong, Excellent and Large” and value creation, market position, risk control and capital discipline. Quality was effectively improved. Net profit rose to RMB365.1 billion, maintaining a reasonable growth. Operating income continued to lead the market. ROA and ROE maintained an excellent level in the market. Net interest margin was 1.61%, kept within a reasonable range. Cost-to-income ratio stood at 28.28%. Volume was reasonably expanded. Deposits, loans and total assets all maintained a leading edge, with total assets close to RMB45 trillion. Market capitalization and brand value continued to lead the market. Risks were prevented and controlled in a targeted manner. Non-performing loans (“NPLs”) ratio stood at 1.36%, showing stable and improved quality of assets. Allowance to NPLs rose to nearly 214%, suggesting stronger resilience to risks. Capital adequacy ratio was 19.1%, ranking among the top few of the world’s largest banks.

During the reporting period, ICBC has topped The Banker Global 1000 list and the list of commercial banks of the Global 500 in Fortune for eleven consecutive years, and led the world’s most valuable banking brands for eight consecutive years. The Bank continued to rank No. 1 in steady development capability under the Gyroscope evaluation system for three consecutive years. As proposed by the Board of Directors, the total expected dividend payout on ICBC’s ordinary shares in 2023 will be RMB109,203 million, that is, RMB3.064 per 10 shares before tax.

Continuing to improve financial supply to serve the real economy in a targeted and effective way

ICBC, keeping in mind its principal duty and core business, continued to improve the investment and financing structure to ensure more resource allocations to major strategies, key fields and weak links in a targeted fashion, consolidate and build momentum for economic recovery and growth, and serve the real economy as the major force.

Funding for the real economy was stepped up. Investment and financing, still front-loaded in 2023, hit all-time highs in either size or growth in the year. Domestic RMB loans increased by RMB2.9 trillion over the previous year, up RMB355.5 billion year-on-year. Investment in RMB bonds broke the mark of RMB10 trillion, an increase of RMB1.28 trillion over a year ago. Lending maintained a reasonable pace, with sound stability and proportionality.

Credit supply was well targeted. The loans to manufacturing, strategic emerging industries, green, inclusive and agriculture-related segments outpaced the average growth of the Bank’s loans. Loans to manufacturing maintained an leading edge with a balance of over RMB3.8 trillion, representing an increase of more than RMB800 billion. Balance of loans to strategic emerging industries stood at RMB2.7 trillion, up nearly RMB950 billion. Balance of green loans exceeded RMB5.3 trillion, up nearly RMB1.4 trillion. Balance of inclusive loans reached RMB2.2 trillion, grew by nearly 44%. 

ICBC served coordinated regional development in a balanced and effective manner. In serving the major regional development strategies of the State, financial resources were allocated between urban and rural areas and among regions in an increasingly balanced fashion. The Bank reached out to serve rural revitalization, with the outstanding agriculture-related loans rising nearly 30% to more than RMB4.2 trillion. The integration of online and offline rural financial services provided greater availability and accessibility through 4,760 points of rural inclusive finance services as well as mobile banking and the ICBC Xingnongtong APP, which served 160 million agriculture-related customers online.

Securing the foundation for high-quality development through active and forward-looking prevention of risks

Enhancing efforts on “active prevention, smart control and comprehensive management”, ICBC continued to improve the enterprise-wide risk management system, so as to manage risks in a more active and forward-looking manner, ensure high-quality development with high-standard security and underpin the financial stability.

Asset quality showed steady improvements. As at the end of 2023, ICBC recorded 1.36% in NPL ratio, down 0.02 percentage points from a year ago. The “scissors difference” between overdue loans and NPLs remained negative for 15 consecutive quarters. A variety of disposal methods were adopted to boost the intensity and efficiency of NPA disposal, making the balance sheet cleaner and healthier.

The enterprise-wide risk management capability was further enhanced. The risk officer system and the new rules for credit approval were thoroughly implemented, serving as “critical valves” in asset quality management. Various steps were taken to enhance product lifecycle management and technological and cyber-security risk control. The joint risk prevention and control mechanism was improved for the five markets of bonds, money, foreign exchange, commodities and stocks, effectively responding to external risk events and market fluctuations.

Risk control became increasingly smarter. The Bank made ongoing improvements in the “ICBC e” series smart risk management systems, kicked off the enterprise-level smart risk control platform project, and continued to boost the capability of early risk identification, warning, detection and handling, so as to build a banking benchmark in security and prudence.

 Gaining new momentum for high-quality development by upholding fundamental principles and breaking new ground

ICBC continued to deepen the strategic layout of “leveraging our strengths, tackling areas of weaknesses and solidifying the foundation” with a focus on changes in customers’ demand. It stepped up the D-ICBC development, advanced the “GBC+” projects and innovation in major businesses and improved the business ecosystem where new growth drivers are springing up, playing a leading role in the national push to build strong financial institutions.

The foundation for creating a ecosystem-based service system was further fortified. The three ends of GBC+ were further coordinated, with the customer chain consolidated along the funding chain. The Bank recorded a net increase of nearly 20 million in number of personal customers and a net increase of 1.3 million in corporate customers, making continuous improvements in the customer ecosystem where personal, micro, small, medium-sized and large customers are balanced and coordinated. To improve the service chain around the customer chain, ICBC became the sole bank to develop the “unified national management system for basic old-age insurance funds”, developed innovative products, such as the “e Migrant Workers Pay Security” for oversight of wages of migrant workers, and provided one-stop services such as “Finance + Government”, “Finance + Industry” and “ “Finance + Public Wellbeing”. To enhance the value chain with the service chain, the new RMB deposits exceeded RMB3.6 trillion based on an improved customer base, maintaining a leading edge.

Digital transition was stepped up. The Digital Inclusive Finance Center was established. The Bank continued to make breakthroughs in proprietary and pioneering technologies, fostering new quality productive forces of ICBC. ICBC became the first financial institution to get the top-grade certification by a trusted agency for the maturity of its digital finance capability. The new-generation Intelligent Banking Ecosystem (ECOS) availability remained above 99.99%. ICBC took the lead in developing an AI large model technology system in the domestic banking industry. ICBC remained the industry leader by number of patent grants.

ICBC effectively served higher-standard opening-up. It endeavored to improve cross-border financial services with a business landscape better aligned with the new development pattern. The Bank opened a branch in Jeddah, Saudi Arabia to further improve its global service network and became an approved RMB clearing bank in Brazil, increasing the number of its overseas RMB clearing houses to eleven. The Bank played an active role in ensuring stable foreign trade and foreign investment, and remained the market leader in cross-border remittances under the “single-window” customs mechanism. The ICBC Business Matchmaker platform added over 250 thousand small and micro enterprise users and facilitated nearly 50 thousand prospective partnerships. The Bank successfully held the third Belt and Road Bankers Roundtable, providing high-quality services for the China International Import Expo (CIIE), Canton Fair, China International Fair for Trade in Services (CIFTIS) and other international exhibition platforms. 

Acting on the philosophy of serving customers to build a satisfactory bank 

ICBC acted on the customer-centered development philosophy in every respect of its business, giving a strong financial impetus to improving the people’s wellbeing and living standards.

Financial services became more available and convenient. At the end of 2023, ICBC had 552 million mobile banking customers, with 229 million monthly active users (MAUs) on the mobile end and nearly RMB100 trillion in annual transactions. The supply of pension finance products and services was increasingly improved. The Group registered RMB4.1 trillion in pension funds under management, maintaining a leading edge in total number of personal pension accounts and total pension contributions. Comprehensive services for new urban residents were further improved, providing diverse services such as payroll, inclusive loans, credit card, medical insurance and social security, day-to-day bill payment and exclusive benefits for new urban residents. Relying on 15.5 thousand ICBC Sharing Stations, the Bank expanded the supply of convenience services in an orderly manner, benefiting more than 12 million new urban residents and other customer groups.

Service scenarios were diversified to boost domestic demand and consumer spending. ICBC made ongoing efforts to help unleash the potential of consumer spending and ensure smooth flows in the national economy, providing high-quality and efficient financial services for market players and consumers. In 2023, the bankcard-based consumption exceeded RMB20 trillion, serving more than 12 million merchants. The ICBC e Life platform-based new ecosystem of life services was built with a wide array of customer benefits services. The platform had nearly 15 million MAUs and over 400,000 merchants. A wide range of steps were taken to promote the parallel development and complementarity of various payment methods, such as bank cards, mobile payments and cash, providing customers with more high-quality, efficient and convenient payment services.

Public welfare and charitable initiatives were carried out regularly. Regarding public welfare undertakings as an important part of its mission as a responsible large bank, ICBC carried out charitable initiatives in various forms under the Group’s “Sight Initiative” philanthropic brand. The Bank donated a total of RMB33.4 million through the “Lifeline Express” Hospital Train project, providing free surgery for close to 14 thousand cataract patients.


(2024-03-28)
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