Industrial and Commercial Bank of China

Industrial and Commercial Bank of China Ltd.
Type Public company
SEHK1398
SSE: 601398
Industry Banking
Financial services
Investment services
Founded Beijing, China (1984 (1984))
Headquarters Beijing
Area served Worldwide
Key people

Jiang Jianqing
(Chairman & Executive Director)

Yang Kaisheng
(Vice Chairman, Executive Director & President)
Products Finance and insurance
Consumer Banking
Corporate Banking
Investment Banking
Investment Management
Global Wealth Management
Private Equity
Mortgages
Credit Cards
Revenue $68.68 billion (2009)
Operating income $24.28 billion (2008)[1]
Net income $18.92 billion (2009)[1]
Total assets $1.724 trillion (2009)[2]
Employees 389,827 (2009)[3]
Website (English) ICBC.com.cn
Business Center in Beijing

Industrial and Commercial Bank of China Ltd. (ICBC) (simplified Chinese: 中国工商银行; traditional Chinese: 中國工商銀行; pinyin: Zhōngguó Gōngshāng Yínháng, more commonly just 工行 Gōngháng) is the largest bank in the world by profit and market capitalization[4]. It is one China's 'Big Four' state-owned commercial banks (the other three being the Bank of China, Agricultural Bank of China, and China Construction Bank). It was founded as a limited company on January 1, 1984. As of March 2010, it had assets of RMB 12.55 trillion (US$1.9 trillion), with over 18,000 outlets including 106 overseas branches and agents globally.[5] In 2011, it ranked number 7[6] on Forbes Global 2000 list of worlds biggest public companies[7].

Contents

History

2005

The bank's Hong Kong operations are listed under the name ICBC Asia. It has purchased the Hong Kong subsidiary of Fortis Bank and rebranded it under its own name on 10 October 2005.

2006

In the runup to its planned initial public offering, on 28 April 2006, three "strategic investors" injected US$3.7 billion into ICBC :

World's largest IPO

The ICBC building in Xi'an

ICBC was simultaneously listed on both the Hong Kong Stock Exchange and Shanghai Stock Exchange on 27 October 2006. It was the world's largest IPO at that time valued at US$21.9 billion, surpassing the previous record US$18.4 billion IPO by Japan's NTT DoCoMo in 1998.[10] In 2010, AgBank broke ICBC's IPO record when it raised $22.1 billion. China's largest commercial bank was also the first company to debut simultaneously on both the Hong Kong and Shanghai stock exchanges.

ICBC raised at least US$14 billion in Hong Kong (H-shares) and another US$5.1 billion in Shanghai (A-shares). Due to heavy subscriptions, the greenshoe (i.e. over-allotment) placements were exercised and ICBC's take rose to US$21.9 billion (17% of ICBC's market value before the IPO), divided in US$16 billion in Hong Kong and US$5.9 billion in Shanghai. Following the global offering, the free float of shares was 22.14% of the market capitalization.

At the end of its first day of trading, the bank's shares closed up almost 15% at HK$3.52 in Hong Kong, compared with the listing price of HK$3.07, which was set at the top of the indicative range due to the strong demand. According to Bloomberg, ICBC's market capitalisation at the end of trade based on its Hong Kong shares was US$156.3 billion, making its equity the world's fifth highest among banks, just behind JPMorgan Chase. Meanwhile, ICBC's Shanghai-listed A-shares recorded more modest gains and ended up 5.1% from the offering price of RMB 3.12.

2008

In August 2008, ICBC became the second Chinese bank since 1991 to gain federal approval to establish a branch in New York City.[11]

At the 2008 ALB China Law Awards, ICBC was crowned:

  • In-House of the Year - Banking & Financial Services In-House Team of the Year
  • In-House of the Year - China In-House Team of the Year

2010

In 2010, ICBC loaned $400 million towards the completion of the Gibe III dam in Ethiopia. Groups that oppose the dam such as International Rivers and Survival International have complained about or have written to ICBC against the dam's funding.[12][13]

Basic figures

As of 2006, ICBC has 2.5 million corporate customers and 150 million individual customers.[14] In 2005, net profit was up 12.4% to RMB 33.7 billion, and the total loan balance was RMB 3,289.5 billion. Total liabilities are RMB 6,196.2 billion, up 11.2%. Delinquent or non-performing loans (NPL) total RMB 154.4 billion, a significant reduction although the figures are widely regarded as being somewhat higher than officially stated. It has an NPL ratio of 4.69% and a capital adequacy ratio of 9.89%.

As of June 29, 2009, ICBC is ranked the 17th largest bank in the world by assets and 8th in the world by tier 1 capital.[15] In July 2007 it was ranked 30th in the world in terms of revenue.[16]

Loans by industry

In millions of Chinese RMB (Yuan) in 2005:

  • Manufacturing: 662,376, 20.1% (28.7% in 2004)
  • Transportation, storage, postage & telecommunications: 367,371, 11.2% (10.2% in 2004)
  • Power, gas and water: 281,179, 8.6% (7.0% in 2004)
  • Retail and wholesale, catering: 265,906, 8.1% (6.9% in 2004)
  • Property development: 194,024, 5.9%, (5.6% in 2004)
  • Social service organization: 103,070, 3.1%, (3.2% in 2004)
  • Construction: 89,666, 2.7%, (2.1% in 2004)
  • Other industries: 313,804, 9.5%, (12.1% in 2004)
  • Discounted bills: 392,717, 11.9%, (8.4% in 2004)
  • Personal loans: 515,042, 15.7%, (13.1% in 2004)
  • Overseas business:104,398, 3.2%, (2.7% in 2004)

Total: 3,289,553

Loan collateral

  • Secured by mortgages: 34.1%
  • Secured by other collateral: 22.1%
  • Guaranteed loans: 23.3%
  • Unsecured loans: 20.5%

Non-performing loans

At the end of 2004, 19.1% of ICBC's portfolio consisted of non-performing loans.[17] In order to clean up ICBC's balance sheet and prepare it for overseas listing, the Chinese government orchestrated a series of capital injections, asset transfers, and government-subsidised bad loan disposals that eventually cost more than US$162 billion.[18] This included an approval for a cash injection of US$15 billion (financed from China's massive foreign exchange reserves) on 28 April 2005.[19] The Beijing-based state company, China Huarong, helped ICBC dispose of its bad loans. As the 2005 annual report records, just under 5% of loans are classified as non-performing, in comparison with the majority of western banks who have lower NPL ratios (US commercial banks around 1%).[20]

See also

Factory 1b.svg Companies portal

References

  1. ^ a b http://www.icbc-ltd.com/NR/rdonlyres/E8605AE9-0A88-43E5-BB68-0AF734977A96/0/2008AnnualReport_Hshare.pdf
  2. ^ Industrial and Commercial Bank of China Limited First Quarterly Report of 2009, http://www.icbc-ltd.com/NR/rdonlyres/74CF5126-A682-4066-BE15-3D8B26E6FCC0/0/2009%E5%B9%B4%E7%AC%AC%E4%B8%80%E5%AD%A3%E5%BA%A6%E6%8A%A5%E5%91%8A%E8%8B%B1%E6%96%87.pdf .
  3. ^ http://www.icbc.com.cn/ICBC/About%20Us/Brief%20Introduction/
  4. ^ http://www.chinadaily.com.cn/china/2007-07/24/content_5442270.htm
  5. ^ China's biggest bank goes to market, Financial Times
  6. ^ "ICBC". Forbes. http://www.forbes.com/companies/icbc/. Retrieved June 6, 2011. 
  7. ^ "The World's Biggest Public Companies". Forbes. http://www.forbes.com/global2000/. Retrieved June 6, 2011. 
  8. ^ "A dragon stirs". The Economist. 12 October 2006. http://www.economist.com/finance/displaystory.cfm?story_id=8031185. 
  9. ^ a b http://www.financialservicesdistribution.com/get.asp?script=article&ID=28963
  10. ^ . http://edition.cnn.com/2006/BUSINESS/09/27/china.icbc.reut/index.html. [dead link]
  11. ^ http://www.federalreserve.gov/newsevents/press/orders/orders20080805a1.pdf
  12. ^ China's largest bank to fund devastating Ethiopian dam, Survival International
  13. ^ China's Biggest Bank to Support Africa's Most Destructive Dam, International Rivers
  14. ^ http://www.chinadaily.com.cn/china/2006-09/27/content_698025.htm.
  15. ^ http://www.thebanker.com/cp/20/T1000_25_Tier1&TotalAssets.gif
  16. ^ http://news.hereisthecity.com/news/business_news/6935.cntns
  17. ^ http://www.chinaonline.com/headlines/cs-protected/C05022403.htm
  18. ^ http://www.ft.com/cms/s/b2cf08c6-6620-11db-a4fc-0000779e2340.html
  19. ^ http://www.marketwatch.com/News/Story/Story.aspx?guid={0B38CE96-E660-4A21-BADE-53F27AFB7229}&siteid=mktw
  20. ^ http://www.adb.org/Documents/Reports/PSA/PRC/PRC_PSA.pdf

External links


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