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ICBC

Industrial and Commercial Bank of China

Summary

Industrial & Commercial Bank of China Ltd. engages in the provision of commercial banking and financial services. It operates through the following business segments: Corporate Banking, Personal Banking, Treasury Operations, and Others. The Corporate Banking segment provides corporate loans, trade financing, deposit-taking activities, corporate wealth management services, custody activities, and various types of corporate intermediary services to corporations, government agencies and financial institutions.

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 to 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, 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, established on 1 January 1984, [non-primary source needed] ICBC was then the fourth of the four specialist banks of 1978–1979 to be made,[19] from the taking of control of commercial activities (“industrial credit and savings business”) from People’s Bank of China so that the latter might be transformed to a newly made central bank.

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.

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.

2006–2008
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 purchased a 5.75% stake for US$2.6 billion, the largest sum Goldman Sachs has ever invested.
Dresdner Bank (a wholly owned subsidiary of Commerzbank) invested US$1 billion.
American Express invested US$200 million.

ICBC Beijing branch in 2 Fuxingmen South Street, Beijing

The ICBC building on the Bund, Shanghai

The ICBC building in Xi’an

The ICBC building in Tokyo
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. 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) 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.

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 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.

2011–2017
On January 24, 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 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 September 24, 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 December 2, 2014, ICBC is ranked the largest bank in the world by assets and by tier 1 capital.

On May 25, 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 February 17, 2016, the Spanish Guardia Civil raided the offices of ICBC in Madrid, Spain, investigating suspicions of money laundering.

On November 18, 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.

Vision

To establish long-lasting relations through our high-quality service approach based on knowledge and creativity, To contribute to our country’s economy by creating social and economic values, To continuously generate added value for our clients, employees and shareholders.

References

https://www.crunchbase.com/organization/icbc-international

http://www.icbc-ltd.com/icbcltd/en/

https://www.facebook.com/ICBCArgentina

https://en.wikipedia.org/wiki/Industrial_and_Commercial_Bank_of_China

https://www.forbes.com/companies/icbc/#7a80f5f41679