In the first half of 2008, ICBC's overseas business institutions demonstrated a well-developed trend with significantly improved profiting capabilities, constantly optimized business structures, and continuously maintained good asset quality. ICBC's overseas asset balance had exceeded USD 43 billion by the end of June 2008, a 22% increase comparing with that of at the beginning of the year.
The overseas institutions had achieved USD 240 million profits after capital allocations and reserves since the half year of 2008, a 42% increase comparing with that of the same period of last year, among which the net revenues of handling fee and commissions had exceeded USD 90 millions, a 28% increase comparing with that of the same period of last year.
The bad loan rate of ICBC's overseas institutions, meanwhile, non-performing loan rate had been kept under the relatively low level of 0.49% with a 0.15% decrease comparing with that of at the beginning of the year.
In addition, Standard Bank Group Ltd. of South Africa with 20% of participation in equity from ICBC had also gained exceptional operating performance in the first half of 2008. According to international accounting standard, the net profits of Standard Bank Group had reached 7.396 billion rand until June 30, a 16% increase comparing with that of the same period of last year. Standard Bank Group has recently announced that the dividend of midyear 2008 is 1.93 rand per share; and ICBC will therefore gain 588 million rand (approximately RMB 550 million) dividend revenue.
Based on the introductions of the related person in charge from ICBC, it is indeed not easy for ICBC's overseas business institutions to submit such an excellent performance record under the operating environment of overall sluggish global economy growing speed and constantly turbulent international financial market this year, which fully reflects the acquired achievements on service transforming and innovative development accomplished by ICBC's overseas business institutions. Specifically, these achievements are primarily reflected in following three aspects.
First, the service association of both the domestic and overseas institutions of ICBC has been further advanced, not only providing Chinese enterprises' overseas expansions with excellent financial services, but also pouring powerful developing force into ICBC's overseas business institutions. Supported by internationalized network, ICBC's overseas business institutions have proactively conducted associated service operation since this year to provide Chinese enterprises' overseas development with international settlement services.
ICBC's overseas business institutions had totally completed the amount of USD 97.3 billon in international settlements in the first half of 2008, a 49.7% increase comparing with that of the same period of last year, including the amount of USD 23 billion in trade settlements, a 96.5% increase comparing with that of the same period of last year.
Meanwhile, in view of assisting Chinese enterprises to enter overseas capital markets, ICBC (Asia) and ICBC domestic branches had collaborated closely to provide 13 Chinese enterprises including China Railway Construction Corporation with IPO payment collection bank and dividend distribution services by the end of the first half of this year; and the market share of these services form ICBC (Asia) has undoubtedly ranked in the first place in this sector at present.
ICBC Luxembourg Branch also conducted associated service operation with domestic institutions to provide the first Chinese public company in NYSE Euronext China Corn Oil SA (Luxembourg) with IPO payment collection services.
Second, highly effective service innovations diversify both the service and revenue structures of ICBC's overseas business institutions. And flourishing E-banking, retail service, customer agent financing service, and so on turns into the new profit growing points of ICBC's overseas business institutions.
Since this year, ICBC (Asia) has formally initiated Personal Banking service in Hong Kong to provide wealth management service for high-scale customers with personal assets more than 10 million Hong Kong dollars. ICBC Macao Branch's UnionPay Card document collection service has continuously taken the lead in the market; and non-interest revenues have developed towards diversified dimensions such as agent service, customer agent financing service, etc.
Meanwhile, ICBC Macao Branch has also proactively promoted liability service, and quality personal and enterprise customer deposits have increased more than USD 220 million comparing with that of at the beginning of the year. ICBC Tokyo Branch, on the other hand, has increased the rates of trade and lease financing services and completed some major lease financing services as the bank groups' loan correspondent bank and guarantee custody bank as well, and sold bank groups' loans to Japanese banks for the first time; meanwhile, it has locally promoted various financing products such as "Personal Fixed-Term Large Amount Favorable Deposits", indicating the start of personal financing service.
The personal financing service focusing on pre-foreign exchange settlement remittance in ICBC Singapore Branch has gained rapid development also, the accumulatively processed transaction number, amount, and revenue of remittance service have increased 144%, 107.6%, and 128% respectively comparing with that of the same period of last year.
Third, the IT systems construction of ICBC's overseas business institutions has been expedited, providing a powerful technical platform for the development of its overseas business institutions. ICBC Macao Branch, ICBC (Indonesia), and Seng Heng Bank energetically advanced banks' IT systems optimizations as well as upgrading and remodeling tasks during the first half of 2008, and gained notable effects.
The smooth advancement of the project not only provides systems support for the service innovations of ICBC's overseas business institutions and completely changes the situation of unitary product type; meanwhile, the improvement of the IT systems function of overseas business institutions and the realization of seamless connection with ICBC domestic IT systems also provides strong support for internal and external associated service operation afterwards, letting overseas business institutions no longer be service solitary island and information solitary island, making it possible to bring the effect of internal and external associated service operation between domestic and overseas business institutions into full play, and providing strong boosting power for the transforming of overseas business institutions.
The related person in charge from ICBC expressed that the network arrangement of its overseas business institutions has been further perfected with the rapid development of various services. ICBC completed 79.93% equity delivery to acquire Macao's Seng Heng Bank at the first half of 2008. The application for establishing ICBC Vietnam Branch has been approved by China Banking Regulatory Commission, and overseas regulatory reporting and approving tasks have been steadily advanced.
The applications for establishing ICBC Doha Branch, ICBC (Middle East), and ICBC Sydney Branch have been approved by local regulatory authorities, and they will be open soon. The Industrial and Commercial International Capital Limited in Hong Kong has been successfully obtained the promulgated investment bank business license.
On August 5, the application for establishing ICBC New York Branch was formally approved by US Federal Reserve Board. ICBC has currently extended overseas business institutions into 15 countries and regions worldwide with business institutions totaling 126, and has established correspondent relation with 1360 banks located in 122 countries and regions, which demonstrates its overseas branch network has been formed with certain scale.
The person in charge also stated that ICBC will continue to advance its overseas business institutions development proactively in its next move; meanwhile, it will steadily build up worldwide institution network system focusing on rising market countries and regions, covering primary international financial centers, and radiating the major economic and trade collaborative regions in China through comprehensively using various modes including applications, establishment, and acquisitions; forge domestically integrated economic pattern, and provide excellent financial service for Chinese enterprise overseas extension.
