On March 30, 2022, Industrial and Commercial Bank of China (stock code SH: 601398; HK: 1398) announced its annual results for 2021. In the year, ICBC promoted its high-quality development on the basis of serving high-quality economic development, achieving stable and excellent results with many highlights.
According to the International Financial Reporting Standards (IFRS), as of the end of 2021, the Group achieved operating income of RMB860.9 billion, up 7.6% from the previous year; pre-provision operating profit of RMB627.5 billion, up 5.5% from the previous year, and net profit of RMB350.2 billion, up 10.2% from the previous year. The return on average total assets and the weighted average return on net assets were higher than the previous year, and the capital adequacy ratio was 18.02%. The non-performing loans (“NPLs”) ratio was 1.42%, down 0.16 percentage points from the end of the previous year. The provision coverage ratio increased to 205.84% quarter on quarter. These indicators better reflect the coordination and balance of value creation, market position, risk control and capital constraints, demonstrating ICBC’s good prospects and strong development resilience to continue to be stronger and better on the basis of its growth.
During the reporting period, ICBC ranked first in the domestic financial industry in terms of its market capitalization, has topped Forbes Global 2000 and The Banker Global 1000 lists for nine consecutive years. Based on the recommendation of the Board of Directors, the projected dividend for ICBC’s ordinary shares for 2021 totaled RMB104.5 billion, representing a pre-tax dividend of RMB2.933 per ten shares.
Continuously Improve the Quality and Effectiveness of Serving the Real Economy
In 2021, ICBC arranged the total amount, pace and structure of investment and financing to continuously improve the adaptability, competitiveness and inclusiveness of financial services and better meet the diversified financial needs of the real economy and people.
The total investment and financing grew reasonably. Domestic RMB loans rose by RMB2.12 trillion, representing a growth of RMB243.3 billion year-on-year, a record high over the same period in term of the increased volume. Bond investments saw a net increase of RMB763.2 billion, with the balance remaining the highest in the industry. The project loan increment exceeded RMB700 billion, up by nearly RMB46.2 billion year-on-year, which strongly supported the medium- and long-term funding needs for the construction of major national projects.
The funds were invested accurately and directly in the key areas and weak links of the real economy. Credit scale in manufacturing, technology innovation, green and other areas led the market. The balance of loans to the manufacturing industry exceeded RMB2 trillion, up RMB319.7 billion from the previous year, of which medium- and long-term loans increased by RMB242.7 billion from the previous year. Green loans grew by 34.4%, with the total amount exceeding RMB2.4 trillion. Inclusive loans grew by more than 50% for the year.
Common prosperity took new steps with the assistance of finance. ICBC has set up a special institution to serve rural revitalization by launching the “ICBC Xingnongtong” brand to continuously expand the breadth and depth of financial support for rural revitalization. For regions just lifted out of poverty, the Bank maintained stable policies and efforts to promote the consolidation and expansion of the accomplishments in poverty alleviation. The balance of agriculture-related loans stood at RMB2.66 trillion. The “Digital Village” comprehensive service platform has covered 31 provinces, providing 100,000 village collectives with inclusive and convenient services.
ICBC continued to provide reasonable fee reduction and profit concessions for the real economy. In the face of the impact of the pandemic on the economy and the operational difficulties of some enterprises, ICBC adopted comprehensive method to provide reasonable fee reduction and profit concessions. In 2021, the average interest rate on newly issued corporate loans decreased by 15bps from the previous year, and the interest rate on newly issued inclusive loans further dropped by 18bps. At the same time, the transaction fees for payment and settlement of small and micro enterprises and individually-owned businesses, as well as transaction fees for ATM interbank cash withdrawals were further reduced.
Consolidate the Risk Control Bottom Line and Continuously Enhance Risk Prevention and Mitigation Capabilities
ICBC insisted on planning ahead, seeing the smallest details, remedying in time and drawing inferences, to constantly improve the enterprise risk management system, and resolutely safeguard the general situations of stable economy and finance.
The asset quality remained stable. ICBC, by coordinating development and security, has been improving overall risk management. In 2021, the NPL ratio cut by 16bps from the beginning of the year, the largest drop in years. Both overdue amount and overdue rate declined, and the scissor difference was kept below zero for 7 quarters in a row, reaching a record low. The ratio of special mention loans slid by 0.22 percentage points from the beginning of the year. Trying to serve the real economy and prevent risks at the same time, the Bank continued to identify and mitigate risks of loans with deferred repayment of principal and interest while implementing the loan servicing postponement policy, to ensure that the risks are controllable.
The building of an intelligent risk control system was advanced. Through intelligent risk control, risks are under differentiated and precise management to prevent the accumulation and expansion of asset risks. In guarding the “entrance”, ICBC strengthened the access screening of new financing and the control of new types of risks such as climate risk and model risk, to effectively reduce the total amount and proportion of risk financing. In securing the “threshold”, ICBC has put into operation an intelligent monitoring and management system for credit approval, and the new regulation on credit approval was fully implemented in domestic institutions. In clearing the “exit”, ICBC applied various means to optimize the disposal structure of non-performing assets to enhance the efficiency of disposal. The NPLs collected and disposed exceeded RMB190 billion throughout the year. The provision coverage ratio rallied to more than 200% quarter on quarter. As a result, the risk resilience ability was further enhanced.
Deepen Transformation and Innovation, and Continuously Stimulate Operational Vitality and Growth Momentum
In 2021, ICBC deepened the implementation of key development strategies such as personal banking, foreign exchange business, coordinated regions development and urban-rural linkage, and actively cultivated and shaped new advantages for high-quality development.
The No.1 Personal Bank Strategy was deeply promoted. The total number of personal customers exceeded 700 million, of which the net increase in the number of county customers accounted for 55%. The number of mobile banking customers reached 469 million and the number of monthly active users was the first in the industry to exceed 100 million. The Bank vigorously developed its wealth management business, managing nearly RMB17 trillion of personal banking assets. The Bank launched the “ICBC with You” service brand, strengthened the online and offline service transformation for the elderly, and launched the “Happy Life Version” of mobile banking. The self-developed “ICBC e-Security” intelligent fraud prevention system enables the Bank to automatically identify accounts at risk of telecom fraud and intercept high-risk transactions, thus guaranteeing customers’ account security.
ICBC sped up digital transformation and improved efficiency. The ecological construction project of intelligent banking ecosystem (ECOS) was awarded PBOC’s special award of the “FinTech Development Awards”, and the data management capability received the highest rating from the Ministry of Industry and Information Technology. The patents granted totaled more than 1,300, and both the number of new and cumulative patents granted continued to lead the banking industry in China. Focusing on people’s livelihood services, the Bank has vigorously built up intelligent government services, intelligent social security, intelligent education and other service scenarios, cooperated with 29 provinces and cities nationwide to implement more than 300 government cooperation scenarios, realizing “one network for all services”. ICBC was the first to issue “physical + electronic” social security cards and support the cross-province issuance of social security cards. In the fields of healthcare, education and travel, the Bank has released more than 20 “finance + industry” cloud service ecosystems and launched more than 2,600 types of financial products and services, leading the market in terms of the number of services and scenarios covered.
ICBC made new achievements in serving the high-level opening-up. In 2021, ICBC Panama Branch was officially opened, expanding ICBC’s overseas network to 49 countries and regions, including 125 branches in 21 countries and regions along the Belt and Road. To support the high-quality development of the Belt and Road, the Bank has successfully promoted the implementation of a number of major overseas projects. By solidly carried out Chunrong Action, ICBC actively supported the stabilization of foreign trade and foreign investment and the optimization of the business environment at ports. In the year, it issued over RMB1 trillion in local and foreign currency financing to key customers of foreign trade and foreign capital and their upstream and downstream enterprises. After qualifying as a pilot bank of “Southbound Connect” and “Cross-boundary Wealth Management Connect”, the implementation of various businesses has been accelerated. The Bank proactively participated in international governance of green finance and successfully issued the Beijing Initiative on Climate-Friendly Banks.
Promote People’s Well-being and Actively Fulfill Social Responsibility
ICBC actively assumes the responsibility as a large bank to fully support the pandemic prevention and control and flood control and disaster relief. Since the outbreak of the pandemic, ICBC employees around the world have made concerted efforts to donate a total of RMB250 million worth of funds and materials. Many employees went to fight the virus at the front line, practicing the spirit of humanitarianism. In the face of the flooding situation in Henan, ICBC immediately made arrangements to support flood prevention, disaster relief and resumption of work and production after the disaster, and urgently provided flood relief loans for the province and issued “special loans for flood prevention and disaster relief” to local SMEs as well as individually-owned businesses.
In 2021, ICBC officially launched the Group’s public welfare brand “ICBC Sight Initiative” and promoted the establishment of a long-term public welfare mechanism. Currently, the program has covered areas such as free medical treatment, care for leftover children in rural areas and assistance in learning and education. Specifically, “Health Express” program has provided free treatment for cataract patients in poor areas, and has donated a total of nearly RMB30 million and provided free sight restoration surgery for nearly 13,000 cataract patients. Additionally, ICBC relied on 15,500 “ICBC Sharing Stations” to provide outdoor workers and the public with services as “taking a break, recharging and sheltering”, serving a total of more than 40 million people.