Industrial and Commercial Bank of China is not only China’s largest bank in terms of capital, assets and profits, its 2012 results make it the world’s largest bank in terms of Tier 1 capital (which is up 15% to $160.6bn compared with its 2011 figure), total assets under international accounting rules (up 14% to $2789bn) and profits (up 14% to $49.1bn). These figures show enormous growth from 2000, when the bank ranked 10th in The Banker's Top 1000 Banks ranking (with Tier 1 capital of $21.9bn), and 2010, when it ranked seventh (with Tier 1 capital of $91.1bn).
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Over the past year, ICBC has shown outstanding growth in many areas as well as strong profitability that few institutions can match: its return on capital reached 30.55% and its return on assets reached 1.76%.
It is not just its results that are growing; the bank's extensive network also continued to expand in 2012. At home, the bank now has 13,520 outlets, including 3069 tier-one sub-branches, as well as 31 tier-one branches and 400 tier-two branches.
Internationally, ICBC is still looking towards further expansion even though by the end of 2012 it was established in 39 countries. Already in 2013 it has established its first presence in Kuwait and, in April, the bank announced plans to buy a 20% stake in one of Taiwan’s biggest banks, Bank Sinopac, in a deal valued at $670m. It is the first major mainland China-based bank to approach a Taiwan financial group.
Aggressive growth
In an interview with The Banker, ICBC chairman Jiang Jianqing explains that profits before tax of overseas operations increased 22% to $1.67bn in 2012, and that the total assets of the bank's overseas institutions grew 31% to $162.7bn. Mr Jianqing sees strong potential to develop in international markets, especially in relation to the remninbi market. He says that he envisages ICBC becoming a ‘global financial group’.
The bank's profit from its overseas operations after deducting the provision for bad debt was $1.67bn, up 22% from the previous year, representing faster growth than other domestic institutions and demonstrating the importance of global operations in stabilising profits and diversifying risks. “We see this overseas growth as very satisfactory," says Mr Jianqing.
The bank’s strategy is to put greater emphasis on asset management, and Mr Jianqing says that wealth management makes up only one-fifteenth of the bank's deposit base. ICBC is still largely a conservative commercial bank when it comes to wealth management, though it plans to increase the number of wealth management products it offers, as well as improving its offering when it comes to risk management controls and information management.Â
Reaping reform rewards
In 2012, ICBC extended the amount of new loans it offered to small and medium-sized enterprises (SMEs), which accounted for 89% of the bank’s total corporate growth. The balance of SME loans at the end of the year amounted to 72% of the bank’s corporate loan balance.
To meet the prudent demand for consumption-driven loans, ICBC extended Rmb272.2bn ($44.3bn) in new personal loans, such as bank card financing and consumer loans, in 2012. The increase in personal loans accounted for 27% of the bank’s total loan growth, while its outstanding personal loans outperformed those of its domestic peers, making it the first bank in the country to surpass Rmb2000bn in loans.
Eight of the bank's key product lines underwent reform in 2012, and the total profits from these lines experienced year-on-year growth of more than 20%. ICBC also stepped up reforms at its provincial branch offices and county-level sub-branches, enhancing its financial services capability in large and medium-sized cities, as well as in key counties and towns.
In terms of product innovation, ICBC continued to strengthen its product line. More than 500 self-developed new products, including a multi-currency credit card and a personal account for foreign exchange trading, were launched in 2012. This propelled the total number of financial products offered by the bank up to 4163, a 28% increase on 2011, enabling ICBC to maintain its distinction as the bank with the widest selection of financial products in China.
Dominating the market
ICBC is the largest wholesale bank in China with the largest market share in both the corporate deposit market and the corporate loan market. In 2012, corporate deposits increased 12% to $1137bn while corporate loans rose 13% to $1045bn. The bank’s trade finance business has developed rapidly with the domestic cumulative disbursement of trade finance growing by 34% in 2012 to reach $326bn.
ICBC is also the largest institutional business bank in China. Its institutional banking offering has been growing rapidly and, in 2012, institutional deposits and its 'due to banks and other financial institutions' grew by 15% to reach $699bn. The bank remains the top retail bank in China in terms of its market share in both the personal deposit market and the personal loan market. In 2012, personal deposits rose by 11% to $1051bn and personal loans rose by 14% to $366.9bn.
The bank’s number of personal wealth management customers increased from 1.5 million in 2011 to 2 million in 2012, and these customers were serviced by more than 50,000 experienced customer managers. At the end of 2012, ICBC had 21,425 associate financial planners and 3533 certified financial planners, the most in China's domestic banking industry.
ICBC also claims to be the largest private bank in China. In 2012, its number of private banking customers grew by 18% from 22,000 to 26,000, and its private assets under management grew 9% to $75.9bn.
Growth, growth, growth
When it comes to credit cards, ICBC is the fourth largest issuer in the world, while in China it is the market leader in terms of card issuance, consumption volume and overdraft balance. In 2012, the number of credit cards issued grew by 9% to reach 77.1 million, the volume of transactions grew by 33% to reach $209bn and the overdraft balance of credit cards grew by 38% to $39.3bn.
In terms of wealth management products issued, ICBC saw growth of 7% in 2012 to reach $949.2bn. The bank is also viewed as the largest precious metal business bank in China, and in 2012 its precious metals business also grew with volumes reaching $177bn, and the growth in clearing volume on behalf of the Shanghai Gold Exchange increasing 38% in 2012 to $40.8bn.
In another leading position ICBC is the largest custodian bank in China with total assets under custody in 2012 rising by 12% to $634.5bn. Also, ICBC saw its investment banking income grow 16% in 2012 to reach $4.2bn. It also saw its cash management customers grow significantly, reaching 813,010, more than six times the number in 2008. Â
