Results Highlights (as at December 31, 2009)
Post-tax profit up 16.3% against in the same period in 2008 to RMB 129.4 billion
Earnings per share (primary and diluted) of RMB 0.39
Return on average total asset of 1.2%, return on weighted average equity of 20.15%
Total asset up 20.8% from end of 2008 to RMB 11785.053 billion
Capital adequacy ratio of 12.36%; core capital adequacy ratio of 9.9%
Non-performing loan rate down 0.75 percentage points from end of 2008 to 1.54%
Provision coverage ratio up 34.26 percentage points from end of 2008 to 164.41%
Note: above results has been prepared in accordance with the International Financial Reporting Standard issued by the International Accounting Standard Board (IASB).
Industrial and Commercial Bank of China ("ICBC", Stock Code: SH: 601398; HK: 1398) announced the 2009 results on March 25. According to IFRSs, ICBC realized a post-tax profit of RMB 129.4 billion in 2009, a jump of 16.3% from last year, earnings per share up 18.2% from last year to RMB 0.39. ICBC posts a steady post-tax profitability growth for 4 consecutive years since its shareholding system reform in 2005 with an annual compound growth rate of 35.8%. ICBC is one of the large banks in the world with the best growth.
In 2009, ICBC sought full embrace of State macro control policy and came out strong from the global financial crisis and economic fluctuation in the country. ICBC managed to sustain heady growth and business re-orientation, achieved better-than-expected results and played its role as a large bank to support the economy to "rally and prosper".
Last year, the outstanding RMB loan balance in all ICBC domestic branches stood at RMB 1035.2 billion. Loans were growing at a controlled pace of 24.2%. More important, ICBC ran the tightest loan book in lending to new customers and restricted lending to companies of "high energy-consumption, high emission, over-production".
An internal rating scheme was in place to strengthen the post-lending management. These measures effectively controlled the proportion of risk shouldn't be happened when too much loans released at one time. Non-performing loan balance and rate have been "both declined" for ten years. Non performing rate was down 0.
75 percentage points to 1.54%, reflecting the steady improvement in asset quality. ICBC was better equipped to "cushion" against risk by having its provision coverage rate up significantly to 164.41% at the end of 2009 from 130.15% a year earlier.
Last year, ICBC has been focusing on building an optimum loan portfolio by strengthening the connection of the credit policy with the State industrial policy, the regional development plan and the expand internal consumption policy. Uphold "Differential treatment, lend to eco-friendly companies and stop lending to high energy-consumption, high emission companies".
Concern was also placed in boosting own profitability while maintaining a high level of loan service to support the economy. ICBC actively supported national key construction projects, key industries and enterprises under State industrial policy as one effort to execute State policy of "increase investment, maintain growth".
Priority was given in lending to "green credit" projects on new energy, resources utilization, energy savings and environmental protection. Loans were strictly controlled to high energy-consumption, high emission companies and projects. 98% of the enterprises receiving ICBC loans were eco-friendly or eco-certified by the environmental protection department, involving more than 99% of the loans.
The remaining less than 1% of the loans were released to companies in the process of getting eco-certification. ICBC attached equal importance in controlling the release of loans to over-production industries and sub-standard repeating construction projects. Loan balance in over-production industries, indicated by the State as very risky, witnessed a net decrease of RMB 7.
14 billion in the year. Meanwhile, ICBC, as always, strongly supported the growth of small-and-medium enterprises (SME) and reasonable consumer demand. More loans were released to top SMEs in various industries and to individual for buying houses or cars. New loans in the year to SME reached RMB 521.
71 billion and RMB 377.5 billion to individual, accounting for an increase of 28.6% and 45.5% respectively. At the same time loans to the two regions of West and Central China where the economy was buoyant and the potential was great, were obviously growing faster than the average growth of all the loans, at 29.
95% and 28.29% respectively.
ICBC pursued an aggressive move to reshape its liability structure and achieved balanced growth between deposit business and wealth management business. In terms of deposit volume, balances of all deposits in ICBC went up to RMB 10.7 trillion by the end of 2009, representing a year-on-year increase of 21.
4%. ICBC is now the largest commercial bank in the world by customer base. In terms of deposit structure, the growth was phenomenon in comparatively low-cost corporate deposits and deposits from other banks, especially in current deposits which drove down the interest payment cost. In 2009, ICBC generated record level of sales in wealth management products to a staggering RMB 3.
32 trillion, accounting for 87.8% jump on the same period a year ago. The products were well-positioned in responding to the diversified needs of the customers and simultaneously pushing the ICBC liability business to a low-cost territory while shifting course.
While maintaining steadfast growth in the underlying commercial banking business, ICBC retained its market leadership in a majority of emerging services through financial innovation and business re-orientation, encompassing credit card, investment banking, asset custody, pension, cash management and precious metal.
Profitability contribution from emerging services to ICBC continued to rise. The optimum balance between revenue structure and business development offset the impact of ICBC profitability during economic turbulent times. ICBC posted a 25.3% increase in yr-on-yr net income of RMB 55.1 billion from banking fees and commissions in 2009, contributing 17.
82% to the operating income and a surge of 3.63% from end of 2008. ICBC issued 289 million bank cards, out of which 52.01 million are credit cards, nearly 13 million new credit cards issued from the beginning of the year, or 33% increase. ICBC not only consolidated its dominance as the largest card issuer in the country, but also ranked No.
4 in the world in credit card issuance; Income from investment banking business surged 56.2% from a year earlier well above RMB 10 billion to RMB 12.539 billion, where ICBC bond underwriting business held the top slot among all the bond underwriters in the country. ICBC has underwritten and distributed 329 bonds in 2009, involving an amount totaled to RMB 561.
75 billion. It's the third year in succession that ICBC secured the first place as the largest bond underwriting institution in China. Assets under ICBC custody up 57.9% from end of previous year to over RMB 1.8 trillion. Annuity funds under ICBC trusteeship and management stood at RMB 7 billion, where 6.
78 million personal annuity accounts under ICBC management and RMB 84.5 billion of annuity funds under ICBC trusteeship, ICBC is now the largest annuity management bank in China. ICBC scored over 280000 cash management clients. Company settlement volume in RMB reached RMB 668 trillion, accounting for 28.
5% growth. Transaction volume in precious metal (brokerage or customer-initiated) totaled 992 tons. ICBC cleared RMB 183.5 billion of gold on behalf of Shanghai Gold Exchange.
ICBC aims to use its flourishing emerging businesses to sharpen its competitive edge in diversification and grow across different markets. The focus is on translating the success in the country across the world, from a traditional commercial bank to integrated financial services. In 2009, ICBC seized the opportunity to escalate its international footprint to Canada, Thailand, Vietnam, Malaysia and Abu Dhabi by acquisition or setting up new subsidiaries.
ICBC and South Africa Standard Bank achieved win-win and great result while working together on various areas in Africa to help Chinese enterprises "Go Global". The success of all ICBC overseas subsidiaries was all the more remarkable given the fact that the year 2009 when large part of the international financial markets came under extraordinary strain.
All of them, including the new branches, chalked up record profits before tax by 165% within the past 12 months. Total assets in all ICBC overseas subsidiaries went to a tune of USD 49.182 billion by the end of 2009, up 22.89% from the beginning of the year. The asset quality of ICBC overseas subsidiaries went from strength to strength.
There was adequate capital to support the risk assets, non-performing asset ratio continued to drop, at 0.36% far below the international peers. Besides gaining momentum in ICBC Credit Suisse, ICBC also injected new capital to ICBC Leasing and reorganized ICBC International last year, scoring notable results in such business areas as financial leasing and licenses.
ICBC elaborates on where it will bulk up and sets for global advance.
In recent years, ICBC is standing at a new historic ground especially going public since the shareholding restructuring. ICBC aspires to perfection and wishes to "Let Customer Satisfy". Henceforth, a host of new strategic measures were taken to improve services. New campaign every year pushing the frontier of change: "Service Innovation Year", "Olympic Service Year", "Service Improvement Year".
Up to the end of 2009, ICBC lifted up its customer service by boosting a network of 16000 branches in the country. New wealth management centers and VIP centers were set up, 35.5% and 25.2% more than the same period a year ago to 149 and 3488 respectively. In 2009, ICBC information system processed an average of 110 million transactions everyday, a jump of 30.
3% over 2008. The historic highest record was 141 million transactions during peak days. ICBC successfully ensured the stable and smooth running of the information system to cope with the rapid growth of business volume. The system availability was a high level of 99.99%. ICBC information system is the best-in-class in the world regardless of system processing capacity or system security.
Meanwhile, ICBC electronic banking network is a comprehensive service network of 8726 self-service banking outlets and nearly 60000 ATM. The transaction volume of ICBC electronic banking in 2009 totaled RMB 181 trillion. It was the first time that electronic banking transactions surpassed those processed at the Counter to 50.
13% of ICBC business volume. This effectively boosts the service efficiency. ICBC is also the most prolific bank in the country to provide the most number of financial products of all types, 311 new products in 2009, 2366 product categories. The coordinated services mutually supported through different channels and the rich product mixes bring numerous opportunities to offer tailored and differential services to all customers, as well as driving revenue streams through better cross-selling and new product promotion.
ICBC underlying strong performance has been widely respected by the market and investors. ICBC stock price rallied steadily in 2009. As at December 31, 2009, ICBC secured the top spot of the largest bank in the world with a stock capitalization of USD 268.982 billion. Meanwhile, ICBC moved up to the fourth place in the global ranking of publicly traded companies by market capitalization.
