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Industrial and Commercial Bank of China Limited (ICBC; ) is a Chinese multinational bank. Founded as a limited company on 1 January 1984, ICBC is a
state-owned State ownership, also called government ownership and public ownership, is the ownership of an industry, asset, or enterprise by the state or a public body representing a community, as opposed to an individual or private party. Public ownersh ...
commercial bank. With
capital Capital may refer to: Common uses * Capital city, a municipality of primary status ** List of national capital cities * Capital letter, an upper-case letter Economics and social sciences * Capital (economics), the durable produced goods used f ...
provided by the Ministry of Finance of China, the bank's Tier 1 capital in 2013 was the largest of one thousand global banks, being the first bank headquartered in China to achieve this distinction in modern history. Subsequently, ranked the largest bank in the world 2017 and 2018, by total assets, (31 December 2020, US$4.324
trillion ''Trillion'' is a number with two distinct definitions: * 1,000,000,000,000, i.e. one million million, or (ten to the twelfth power), as defined on the short scale. This is now the meaning in both American and British English. * 1,000,000,000,0 ...
Francis Garrido & Saqib Chaudhry (2019) â€
The world's 100 largest banks
published 5 April 2019 by S & P Global – accessed 8 February 2020
), ICBC was positioned at 1st in
The Banker ''The Banker'' is an English-language monthly international financial affairs publication owned by ''The Financial Times'' Ltd. and edited in London, United Kingdom. The magazine was first published in January 1926 through founding Editor, Brend ...
s Top 1000 World Banks ranking, every year from 2012, and first (2019) on the
Forbes Global 2000 The ''Forbes'' Global 2000 is an annual ranking of the top 2000 public companies in the world, published by ''Forbes'' magazine. "The Global 2000" annual ranking is assembled by ''Forbes'' using a weighted assessment of four metrics: sales, profi ...
list of the world's biggest public companies. Furthermore, ICBC is considered one of the most profitable companies in the world, ranking fourth according to Forbes. It is considered a systemically important bank by the Financial Stability Board. Several former employees of ICBC have moved on to work in prominent government positions in China. Notable ICBC alumni include Chairman of CSRC Huiman Yi, and Deputy Governor of PBoC Gongsheng Pan.


History


Preconditions of 1948–1979

From 1948 the mono-banking system of China was the People's Bank of China, providing both policy lending, and, operations to the commercial sector. During 1978 toD. Luo (2016) —
The Development of the Chinese Financial System and Reform of Chinese Commercial Banks
p.1 – 1.1, published Springer 8 March 2016 , The
Nottingham China Policy Institute Nottingham ( , locally ) is a city and unitary authority area in Nottinghamshire, East Midlands, England. It is located north-west of London, south-east of Sheffield and north-east of Birmingham. Nottingham has links to the legend of Robin H ...
Series – accessed 26 February 2020
1979 banking reform was initiated by the government of China, with the express desire of bringing into existence a central bank accompanying four total central governmentally owned specializing banks, one of these four being ICBC.


1979–1985

A Two-Tier banking system was made.


1984–2005

By rights of a contradiction within the economic functioning of the government of China, the People's Republic, the
State Council of China The State Council, constitutionally synonymous with the Central People's Government since 1954 (particularly in relation to local governments), is the chief administrative authority of the People's Republic of China. It is chaired by the p ...
, during September of 1983 made a decision to separate certain activities of the government to an exclusively operating organisation, subsequently named the Industrial and Commercial bank of China,http://www.icbc-ltd.com/ICBCLtd/About%20Us/ICBC%20History/ – accessed 8 February 2020 established on 1 January 1984. ICBC was then the fourth of the four specialist banks of 1978–1979 to be made, from the taking of control of commercial activities ("industrial credit and savings business") – re-access (using translation function) 26 February 2020) from People's Bank of China so that the latter might be transformed to a newly made central bank.Vários Autores,
Hassanali Mehran Hassanali is a Muslim name combining Hassan and Ali. As a surname, it can refer to: * Khalid Hassanali, Trinidad and Tobago engineer and businessman * Mustafa Hassanali (born 1980),Tanzanian fashion designer and doctor * Noor Hassanali Noor Mo ...
, Bernard Laurens, Marc Quintyn, Thomas Nordman, International Monetary Fund Staff (1996) — Monetary and Exchange System Reforms in China: An Experiment in Gradualism
p.12 (loads to 10)
published by the International Monetary Fund 26 September 1996 , , IMF Occasional Paper no. 141 – accessed 26 February 2020
ICBC opened a branch in Luxembourg which became the European headquarters of the bank in 2011. ICBC (Europe) S.A. operates a network covering branches in major European cities, namely Paris, Amsterdam, Brussels, Milan, Madrid, Barcelona, Warsaw and
Lisbon Lisbon (; pt, Lisboa ) is the capital and largest city of Portugal, with an estimated population of 544,851 within its administrative limits in an area of 100.05 km2. Grande Lisboa, Lisbon's urban area extends beyond the city's administr ...
. The bank's Hong Kong operations are listed under the name ICBC Asia. It has purchased the Hong Kong subsidiary of
Fortis Bank BNP Paribas Fortis is an international bank based in Belgium and is a subsidiary of BNP Paribas. It was formerly, together with Fortis Bank Nederland, the banking arm of the financial institution Fortis. After the ultimately unsuccessful ABN-AMR ...
and rebranded it under its own name on 10 October 2005. In June 2005, ICBC Credit Suisse Asset Management Co., Ltd., a joint venture between ICBC (55%), Credit Suisse First Boston (25%) and COSCO (20%), was formally established in China. Subsequently ICBC acquired the 20% stake from COSCO and a 5% stake from CSFB.


2006–2008


Customer base

As of 2006, ICBC had 2.5 million corporate customers and 150 million individual customers.


IPO

In the runup to its planned initial public offering, on 28 April 2006, three "strategic investors" injected US$3.7 billion into ICBC: *
Goldman Sachs Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, H ...
purchased a 5.75% stake for US$2.6 billion, the largest sum
Goldman Sachs Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, H ...
has ever invested. *
Dresdner Bank Dresdner Bank AG was a German bank and was based in Frankfurt. It was one of Germany's largest banking corporations and was acquired by competitor Commerzbank in May 2009. History 19th century The Dresdner Bank was established on 12 Novemb ...
(a wholly owned subsidiary of
Commerzbank Commerzbank AG () is a major German bank operating as a universal bank, headquartered in Frankfurt am Main. In the 2019 financial year, the bank was the second largest in Germany by the total value of its balance sheet. Founded in 1870 in Hambur ...
) invested US$1 billion. *
American Express American Express Company (Amex) is an American multinational corporation specialized in payment card services headquartered at 200 Vesey Street in the Battery Park City neighborhood of Lower Manhattan in New York City. The company was found ...
invested US$200 million. ICBC was simultaneously listed on both the
Hong Kong Stock Exchange The Stock Exchange of Hong Kong (SEHK, also known as Hong Kong Stock Exchange) is a stock exchange based in Hong Kong. As of the end of 2020, it has 2,538 listed companies with a combined market capitalization of HK$47 trillion. It is repor ...
and
Shanghai Stock Exchange The Shanghai Stock Exchange (SSE) is a stock exchange based in the city of Shanghai, China. It is one of the three stock exchanges operating independently in mainland China, the others being the Beijing Stock Exchange and the Shenzhen Stock Exc ...
on 27 October 2006. It was the world's largest
IPO An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investment ...
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. In 2010, Agricultural Bank of China 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 H shares () refer to the shares of companies incorporated in mainland China that are traded on the Hong Kong Stock Exchange. Many companies float their shares simultaneously on the Hong Kong market and one of the two mainland Chinese stock excha ...
) and another US$5.1 billion in Shanghai ( A-shares). Due to heavy subscriptions, the
greenshoe Greenshoe, or over-allotment clause, is the term commonly used to describe a special arrangement in a U.S. registered share offering, for example an initial public offering (IPO), which enables the investment bank representing the underwriters to ...
(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 Market capitalization, sometimes referred to as market cap, is the total value of a publicly traded company's outstanding common shares owned by stockholders. Market capitalization is equal to the market price per common share multiplied by t ...
. 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. During July 2007 ICBC was ranked 30th in the world in terms of revenue.


Foreign activity

In August 2008, ICBC became the second Chinese bank since 1991 to gain federal approval to establish a branch in New York City. ICBC had signed a lease with the Trump Organization for office space in the Trump Tower in 2008. ICBC was Trump Tower's largest office tenant as of 2012. ICBC loans $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.


2011– present

On 24 January 2011, ICBC opened a branch office in Madrid, Spain. On 20 May 2011, Industrial and Commercial Bank of China Ltd. established two branches in Pakistan, one in Karachi, the other in Islamabad. On 18 August 2011, ICBC passed the examination from State Bank of Pakistan and started its business in Pakistan. During November 2012, ICBC acquires a 80% stake (valued at $600 million) of Standard Bank Argentina, the largest operation of a Chinese bank in Latin America. In Argentina, the bank has ~1,000,000 individual customers, ~30,000 companies of all categories and more than 1600 corporate companies. During the
2013 Korean crisis The following lists events that happened in 2013 in the Democratic People's Republic of Korea. In 2013, tensions between North Korea and South Korea, the United States, and Japan escalated because of United Nations Security Council Resolution 2087 ...
, the Industrial and Commercial Bank of China halted business with a North Korean bank accused by the United States of financing Pyongyang's missile and nuclear programs. It was announced at the end of July 2013 that South Africa's Standard Bank was in talks to sell its markets business in London to the Industrial and Commercial Bank of China for more than $500 million. On 24 September 2014, ICBC Kuwait Branch officially opened in Kuwait City, capital of Kuwait. As the first and currently the only Chinese bank in Kuwait, the establishment of ICBC Kuwait Branch ended the history of no Chinese bank's presence in Kuwait. Meanwhile, it is also the fourth branch of ICBC in the Middle East, following branches in Dubai, Abu Dhabi and Doha. As of 2 December 2014, ICBC is ranked the largest bank in the world by assets and by tier 1 capital. On 25 May 2015, the Company further strengthened its presence in the Middle East and Europe by purchasing Turkey's TekstilBank and forming its ICBC Turkey subsidiary. On 17 February 2016, the Spanish Guardia Civil raided the offices of ICBC in Madrid, Spain, investigating suspicions of money laundering. On 18 November 2016, the bank obtained a license to take deposits in Russia. ICBC Financial Services, the bank's brokerage unit, provided about $88 billion of repo financing at the end of 2015, up from $59 billion two years ago, according to regulatory filings. The figures are before netting agreements that can be used to reduce overall assets and liabilities. Almost all the repo financing that ICBC provides is on U.S. government bonds. ICBC launched robo-advisor service to its wealth-management operations in 2017. In October 2017, the Bank reported a 3.3 percent rise in its net profit for the third quarter. ICBC reported 10.3 pct growth in its profit along with exceptional growth in its revenue during the year 2021. This was caused by the gradual recovery of the Chinese economy after the Covid-19 pandemic.


Finances


Accounting

ICBC has the policy of preparing accounts conforming to the International Financial Reporting Standards, accepting specifically criteria IFRS 9 (pertains to the definition and rating of asset, liability, and a number of all of the existing purchasing contracts for non-financial purchases) from 1 January 2018. and IFRS 16 (pertaining to lease) from 1 January 2019.Offering Circular
p.6, London Stock Exchange – accessdate 9 February 2020


Basic figures


2005

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%.


Summary


=2003–2018

= Financials in
Renminbi The renminbi (; symbol: ¥; ISO code: CNY; abbreviation: RMB) is the official currency of the People's Republic of China and one of the world's most traded currencies, ranking as the fifth most traded currency in the world as of April 2022. ...


Loans


Listed to 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


With collateralization

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


Non-performing

At the end of 2004, 19.1% of ICBC's portfolio consisted of non-performing loans. 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. This included an approval for a cash injection of US$15 billion (financed from China's massive foreign exchange reserves) on 28 April 2005. The Beijing-based state company,
China Huarong Asset Management China Huarong Asset Management Co., Ltd. known as just China Huarong () is a majority state-owned financial asset management company in China, with a focus on distressed debt management. It was one of the four asset management companies that the ...
, 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 are typically around 1%).


Board of directors

The company has 449, 226 employees, there are 24 members of the board, with one chairmen, one supervisory board chairman and one vice-chairman.
Chen Siqing Chen Siqing (; born 2 April 1960) is a Chinese banker who is the current chairman of the board of the Industrial and Commercial Bank of China, in office since April 2019. He previously served as chairman the board of the Bank of China and before ...
, the current chairman, assumed his role after resigning in April 2019 from Bank of China, where he was the chair, executive director and chairman and participating board member within the Strategic Development Committee. Siqing had no disagreement with the Board at the time of his resignation, made purely for the reason of vocational change to ICBC.
Yi Huiman Yi Huiman (; born 19 December 1964) is a Chinese banker, and the chairman of China Securities Regulatory Commission. He is the former chairman of the Industrial and Commercial Bank of China. He is an alternate member of the 19th Central Committe ...
, the previous chairman, finished with the company to fulfil the position of chairman at the
China Securities Regulatory Commission The China Securities Regulatory Commission (CSRC) is a government ministry of the State Council of the People's Republic of China (PRC). It is the main regulator of the securities industry in China. History China's first Securities Law was ...
. As of 17 May 2020, the board is as stands: *
Chen Siqing Chen Siqing (; born 2 April 1960) is a Chinese banker who is the current chairman of the board of the Industrial and Commercial Bank of China, in office since April 2019. He previously served as chairman the board of the Bank of China and before ...
( 陈四清), chairman of ICBC, former Bank of China chairman * Gu Shu, president of ICBC * Lu Yongzhen, former director on the National Development and Reform Commission * Zheng Fuqing, former Ministry of Finance of the People's Republic of China official * Mei Yingchun, former Ministry of Finance of the People's Republic of China and World Bank official * Feng Weidong, former secretary of the Ministry of Finance of the People's Republic of China * Cao Liqun, former
State Administration of Foreign Exchange The State Administration of Foreign Exchange (SAFE) of the People's Republic of China is an administrative agency under the State Council tasked with drafting rules and regulations governing foreign exchange market activities, and managing the s ...
official * Anthony Francis Neoh, former Hong Kong SEC chairman * Yang Siu Shun, former chairman of PricewaterhouseCoopers Hong Kong * Shen Si, former executive director of Shanghai Pudong Development Bank *
Nout Wellink Arnout Henricus Elisabeth Maria "Nout" Wellink (born 27 August 1943) is a Dutch economist and former central banker. In 2010, ''Financial News'' determined that Wellink was the man who was believed to have wielded the greatest influence on worldw ...
, former president and chairman of
De Nederlandsche Bank De Nederlandsche Bank NV (DNB) is the central bank of the Netherlands. Founded by King William I in 1814, it is part of the European System of Central Banks (ESCB). De Nederlandsche Bank is a public limited company (Dutch: '' naamloze vennoots ...
* Fred Zuliu Hu, former
IMF The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster globa ...
and World Economic Forum official


Environmental policy and record

In 2008 ICBC was the first Chinese Bank to adopt the Equator Principles, an international set of social and environmental standards for financial institutions launched in 2003. It has also adopted the Green Credit Policy launched in 2007 by the Chinese Ministry of Environmental Protection. International environmental groups have criticized ICBC for failing to adhere to its social environmental standards and of being hypocritical, because ICBC is involved in the financing of the controversial Gilgel Gibe III Dam in Ethiopia.


Subsidiaries


Domestic

* ICBC Credit Suisse Asset Management Co., Ltd.


International

*
Industrial and Commercial Bank of China (Asia) The Industrial and Commercial Bank of China (Asia), or more commonly known as ICBC (Asia) (Traditional Chinese: 中國工商銀行(亞洲), 工銀亞洲) is a licensed bank incorporated in Hong Kong. It is a subsidiary of the Industrial and Commer ...
*ICBC Standard Bank Plc *ICBC International Securities Limited * Industrial and Commercial Bank of China (Canada) * Industrial and Commercial Bank of China USA NA * Industrial and Commercial Bank of China (Mexico) *
Industrial and Commercial Bank of China (Macau) The Industrial and Commercial Bank of China (Macau) Limited () formerly known as the Seng Heng Bank Limited () established in 2009, is the third largest locally incorporated bank in Macau, China. In August 2007, Industrial and Commercial Bank of Chi ...
* Industrial and Commercial Bank of China (Thai) * ICBC Turkey * ICBC Argentina * Industrial and Commercial Bank of China (Pakistan) *Industrial and Commercial Bank of China (Zurich)


Controversies

In 2005, the Chinese government arrested several government officials in addition to bankers with regards to the accusation of a scheme to take illegally US$900 million from ICBC. In November 2015, ICBC Standard Bank, an overseas subsidiary acquired in February of that year, agreed to pay a fine of a maximum of $40 million to UK authorities. On 17 February 2016, the
Spanish Guardia Civil The Civil Guard ( es, Guardia Civil, link=no; ) is the oldest law enforcement agency in Spain and is one of two national police forces. As a national gendarmerie force, it is military in nature and is responsible for civil policing under the au ...
supported by Europol, arrested six executives of the Spanish location of the bank accused of money-laundering. In 2018, the US Federal Reserve had found "serious deficiencies" of the bank, on, anti-money laundering protections. On 12 August 2021, a former senior banker at Industrial and Commercial Bank of China, Gu Guoming was sentenced to life in jail by Chinese authorities, after being found guilty of
bribery Bribery is the Offer and acceptance, offering, Gift, giving, Offer and acceptance, receiving, or Solicitation, soliciting of any item of value to influence the actions of an official, or other person, in charge of a public or legal duty. With reg ...
.


Awards

* ''
Forbes Global 2000 The ''Forbes'' Global 2000 is an annual ranking of the top 2000 public companies in the world, published by ''Forbes'' magazine. "The Global 2000" annual ranking is assembled by ''Forbes'' using a weighted assessment of four metrics: sales, profi ...
'' – the World's Largest Public Company


References


Bibliography

Flora Xiao Huang, Horace Yeung (2019
Chinese Companies and the Hong Kong Stock Market
sub-heading 6.4.4, published by Routledge, 30 October 2013 ,


External links

*
Financial Reports
*
Industrial and Commercial Bank of China


{{DEFAULTSORT:Industrial And Commercial Bank Of China 2006 initial public offerings Banks of China Chinese brands Chinese companies established in 1984 Banks established in 1984 Companies based in Beijing Companies in the CSI 100 Index Companies in the Hang Seng Index Companies in the Hang Seng China Enterprises Index Companies listed on the Hong Kong Stock Exchange Companies listed on the Shanghai Stock Exchange Government-owned companies of China H shares Multinational companies headquartered in China Systemically important financial institutions