Industrial and Commercial Bank of China
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| Industrial and Commercial Bank of China Limited (ICBC) | |
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| Type | Public company SEHK: 1398, SSE: 601398 |
| Founded | 1984 |
| Headquarters | Xicheng District, Beijing, China |
| Key people | Jiang Jianqing, Chairman / Executive Director Yang Kaisheng, Vice Chairman / Executive Director / President |
| Industry | Finance |
| Products | Financial services |
| Operating income | ▲ RMB 256.029 billion (2007)[1] |
| Net income | ▲ RMB 224.460 billion (2007)[2] |
| Total assets | RMB 8,689 billion (2007)[3] |
| Employees | 351,448 (2006)[2] |
| Website | (English) www.icbc.com.cn |
Industrial and Commercial Bank of China (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 of 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 is the largest bank in the world in terms of market value and one of the world's top ten banks by assets.
It was founded as a limited company on January 1, 1984. As of 2006, it had assets of RMB 7,055 billion (US$893 billion), with over 18,000 outlets including 106 overseas branches and agents globally.[4] In July 2007, with a market capitalization of US$254 billion it became the world's most valuable bank after a strong gain in its share price, overtaking Citigroup.[5]
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[edit] Events in 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.
[edit] Events in 2006
In the runup to its planned initial public offering, on 28th April 2006, three "strategic investors" injected US$3.7 billion into ICBC :
- Goldman Sachs purchased a 5.75% stake for US$2.6 billion, the largest sum Goldman Sachs has ever invested [1].
- Dresdner Bank (a wholly owned subsidiary of Allianz) invested US$1 billion [2].
- American Express invested US$200 million [3].
[edit] Events in 2007
On October 24th, The Industrial and Commercial Bank of China (ICBC) bought 20% of Standard Bank of South Africa, the largest bank in Africa, for R36,7bn (USD 5.5 bn) in cash, the biggest foreign acquisition by a Chinese commercial bank yet. ICBC plans to open a branch in Russia in November and open branches in Sydney, Dubai and Doha.
[edit] World's Largest IPO
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 to date, surpassing the previous record US$18.4 billion IPO by Japan's NTT DoCoMo in 1998.[4] China’s largest commercial bank is 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 it the world’s fifth largest bank, 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.
[edit] Basic figures
ICBC has 2.5 million corporate customers and 150 million individual customers. [6] 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%.
[edit] Loans by industry (2005)
In millions of Chinese RMB (Yuan):
- 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
[edit] Loan collateral
- Secured by Mortgages: 34.1%
- Secured by other collateral: 22.1%
- Guaranteed loans: 23.3%
- Unsecured loans: 20.5%
[edit] Non-performing loans
At the end of 2004, 19.1% of ICBC's portfolio consisted of non-performing loans.[5] 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.[6] This included an approval for a cash injection of US$15 billion (financed from China's massive foreign exchange reserves) on April 28, 2005.[7] 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%) [8].
[edit] Legal issues
- February, 2005: A Hunan branch manager was convicted of bribery and imprisoned for 19 years.
- April, 2006: An assistant branch manager in Guangdong found guilty on similar charges and jailed for 12 years.
[edit] External links
- (English) 2005 Annual Report
- (Chinese) Industrial and Commercial Bank of China
- (English) Industrial and Commercial Bank of China
[edit] References
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