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ICBC Business Review
Through its continuous endeavor and stable development, the Bank has developed into the top large listed bank in the world, possessing an excellent customer base, a diversified business structure, strong innovation capabilities and market competitiveness. The Bank has its presence in six continents, and its overseas network has expanded to 41 countries and regions.The Bank provides comprehensive financial products and services to 5,090 thousand corporate customers and 465 million personal customers by virtue of the distribution channels consisting of 17,122 domestic institutions, 338 overseas institutions and 2,007 correspondent banks worldwide, as well as through its E-banking network comprising a range of Internet and telephone banking services and self-service banking centers, forming a diversified and internationalized operating structure focusing on commercial banking business and maintaining a leading position in the domestic market in the commercial banking sector.In 2014, the Bank was named the “Global Bank of the Year” by The Banker, ranked the first place among the Top 1000 World Banks by the Banker and the largest enterprise in the world among the Global 2000 listed by the US magazine Forbes for the second consecutive year.

Financial Highlights
By the end of 2014, the Bank’s total assets amounted to RMB20,609,953 million, up by RMB1,692,201 million or 8.9% year on year. Total liabilities of the Bank amounted to RMB19,072,649 million, RMB1,433,360 million or 8.1% higher than that at the end of the previous year. The Bank realized a net profit of RMB276,286 million in 2014, representing an increase of 5.1% as compared to the previous year. Return on average total assets stood at 1.40%, and return on weighted average equity was 19.96%. Core tier 1 capital adequacy ratio stood at 11.92%, tier 1 capital adequacy ratio 12.19%, and capital adequacy ratio 14.53%. Operating income amounted to RMB658,892 million, recording an increase of 11.7%. Specifically, net interest income was RMB493,522 million, growing by 11.3%. Non-interest income reached RMB165,370 million, rising by 13%. Operating expenses amounted to RMB292,280 million, recording an increase of 18.5%, and cost-to-income ratio dropped by 1.28 percentage points to 26.75%.

[Corporate Banking]
At the end of 2014, the Bank’s corporate customers increased by 359 thousand over the end of the previous year to 5,094 thousand, including 140 thousand corporate customers having loan balances with the Bank. According to statistics from PBC, the Bank had the largest balance of both corporate loans and corporate deposits in the banking industry, with a market share of 11.17% and 11.64%, respectively.

Corporate Deposits and Loans
At the end of 2014, the balance of corporate loans reached RMB7,612,592 million, representing an increase of RMB566,077 million or 8.0% over the end of the previous year. The balance of corporate deposits hit RMB8,037,133 million, representing an increase of RMB533,636 million or 7.1% over the end of the previous year.

Small and Medium-Sized Enterprise Business
The Bank gives priority to SMEs in credit resource allocation, and enhanced services to SMEs in diverse ways. At the end of December 2014, the balance of loans to small, micro and medium enterprises totaled RMB4,525,444 million, of which, the loans to medium-sized enterprises reached RMB2,803,904 million and the loans to small and micro enterprises stood at RMB1,721,540 million.The Bank was named the “Award of Outstanding Contribution to Micro and Small Enterprise Finance” by National Business Daily.

Institutional Banking
The Bank improved people’s livelihood related financial services, actively blazed new trails into interbank cooperation and effectively consolidated partnership with customers. The Bank kept on leading the market in the number of thirdparty custody customers and the amount of funds under custody for five straight years. The Bank ranked the first in the banking industry in terms of the amount of central finance and government business cards under agency service and in terms of the number and amount of local government bonds for which it was the lead underwriter.

Settlement and Cash Management
With diversified products system and service contents, the Bank solidifed its strength in customer base. At the end of 2014, the Bank maintained 6,126 thousand corporate settlement accounts, representing an increase of 7.3% over the end of the previous year, and the volume of settlements reached RMB1,897 trillion, up 9.6% over the previous year. The Bank maintained its leading position in the business size. Cash management customers grew by 16.6% to 1,125 thousand, including 4,374 global cash management customers after increasing by 14.7% over the year beginning.

International Settlement and Trade Finance
Leveraging on its advantages in local and foreign currency resources and close interaction between domestic and overseas branches, the Bank enhanced its services to import and export enterprises, and improved its service capability in international settlement and trade finance. In 2014, domestic branches disbursed an aggregate of USD148.6 billion in international trade finance. International settlements scaled up by 16.7% over the previous year to USD2.7 trillion. Overseas institutions handled transactions worth USD956.7 billion, up 29.9%.

Investment Banking
The Bank expanded bond underwriting business and underwrote various debt financing instruments worth RMB470.0 billion throughout 2014. In 2014, the investment banking income jumped by 3.4% from the previous year to RMB30,474 million.

[Personal Banking]
Pressing ahead with the mega retail strategy, the Bank improved the customer-oriented operating service system as well as the integrated service capability and market edges of retail banking. At the end of 2014, the Bank had 465 million personal customers, including 9.64 million personal loan customers, representing an increase of 33.30 million and 0.90 million from the end of the previous year respectively.

Personal Deposits
At the end of 2014, the balance of the Bank’s personal deposits amounted to RMB7,188,607 million, representing an increase of RMB292,768 million or 4.2% from the end of the previous year, of which, personal demand deposits and personal time deposits added by 5.3% and 3.4% respectively.

Personal Loans
The Bank put the role of residential mortgages as a main component and the pillar of personal loans system into play. At the end of 2014, the balance of the Bank’s personal loans amounted to RMB3,063,465 million, representing an increase of RMB335,864 million or 12.3% from the end of the previous year. Personal housing loans increasd by RMB349,831 million or 20.3%.

Private Banking
Private banking services were made available under mobile banking, Internet banking, WeChat services and “social networking platform” on all fronts. At the end of 2014, the Bank managed RMB735.7 billion assets for 43.1 thousand private banking customers.

Bank Card Business
At the end of 2014, the Bank issued 660 million cards, representing an increment of 85.08 million from the end of the previous year. In 2014, bank cards-based consumptions increased by 29.8% compared with last year to RMB7,491.5 billion. Bank card business income rose by 23.1% to RMB35,133 million.

.Credit Card Business
With innovations in Internet-based financial products, the Bank was the first in China to have POS online by combining the four authentication methods (Internet banking payment, mobile phone verification, 3D certification and card-notpresent payment) for universal acceptance of bank cards by online merchants. At the end of 2014, over 100 million credit cards were issued and the consumption volume expanded by 15.8% from the previous year to RMB1,868.6 billion. Total credit card loans went up by RMB59,110 million or 19.2% to RMB366,245 million. The Bank led its peers in terms of number of cards issued, consumption volume and loan volume.

.Debit Card Business
In 2014, ICBC debit card–based consumption volume ascended by 35.2% from 2013 to RMB5,622.9 billion.

[Financial Asset Services]
Embracing the opportunities of co-existing cross-industry competition and cooperation and addressing the diverse needs of customers for allocating their financial assets, the Bank expedited the establishment of an integrated business operation system across different sectors throughout the world based on the integration of the Group’s business strengths including asset management, custody, pension and precious metals, along with the functions of diversified subsidiaries specializing in investment banking, fund, insurance, etc.

Wealth Management Services
Priority was given to develop the line of net-worth products including Enhanced Return series, Stable Return series, Non-fixed Term series and Quasi-fund series. The Bank seized the investment opportunities from mixed ownership reform and made a breakthrough in purely market-based equity investment. By the end of 2014, the Bank’s stock wealth management products increased by 48.0% compared with the previous year end to RMB1,982,483 million.

Asset Custody Services
The Bank consolidated its advantages of custody services on the capital markets, and actively expanded emerging custody service markets. At the end of 2014, total net value of assets under the Bank’s custody exceeded RMB5.82 trillion, representing an increase of 26.1% from the previous year end. The Bank remained as China’s top custodian bank.

Pension Services
At the end of 2014, the Bank provided pension management services for 44,024 enterprises, rising by 4,749 from the end of the previous year. The pension funds under the Bank’s trusteeship amounted to RMB69.1 billion; the Bank managed 13.57 million individual pension accounts, and the pension funds under the Bank’s custody totaled RMB349.7 billion. The Bank led other banks in terms of the scale of enterprise annuity funds under the Bank’s trusteeship, number of individual enterprise annuity accounts and enterprise annuity funds under the Bank’s custody.

Precious Metal Business
New precious metal offerings adapting to the needs of the youth and suitable for collection and inheritance by virtue of their traditional cultural features were introduced innovatively. In 2014, the sum of precious metal business transactions was RMB1.03 trillion. The Bank cleared RMB343.7 billion on behalf of the Shanghai Gold Exchange, ranking No. 1.

Franchise Treasury Business
The Bank enhanced the service capability of personal foreign exchange settlement and sales outlets and enriched the variety of trading currencies. Bundled marketing of foreign exchange trading, trade finance and RMB and foreign currency-denominated deposits was launched to meet customers’ requirements for managing currency risk. It completed franchise foreign exchange settlement and sales of USD523.6 billion.The franchise foreign exchange trading volume hit USD160.7 billion.

Asset Securitization Business
The Bank successfully issued an aggregate of RMB5,572 million worth credit assets backed securities on 14 May 2014. The Bank served as originator and lending services provider of this project.

Agency Sales
By attracting new customers and strengthening precision marketing, the Bank increased the funds under agency sales by 19.7% compared with 2013 to RMB1,062.8 billion. The Bank conducted agency sales of RMB81.5 billion worth of treasury bonds.Widening the distribution channels of Internet banking, self-service terminals and e-commerce platform, etc., the Bank sold RMB102.7 billion worth of insurance products on an agency basis, increasing by 21.5%.

[Treasury Operations]
In 2014, the Bank actively adapted to the new normal of economic growth, adjusted investment and trading strategies at due time, took different measures to increase the profitability of treasury operations and proactively explored the innovation of business patterns and key products.

Money Market Activities
The Bank conducted a flexible operation and improved fund returns to satisfy the liquidity management needs. In 2014, domestic trading amount in the inter-bank market was RMB15.27 trillion, of which lending amounted to RMB11.25 trillion. The transaction volume in foreign exchange money markets recorded USD198.6 billion.

In 2014, the yield on RMB bond descended. The Bank took a variety of measures to raise the yield. The Bank actively optimized the structure of foreign currency bond portfolio, suitably increased the investment in offshore USD bonds of Chinese institutions and effectively improved the resistance against interest rate risk and the profitability of foreign currency bond portfolio. In 2014, the transaction volume of RMB bonds and foreign currency bonds in trading book scored RMB246.6 billion and USD12.2 billion respectively.

In 2014, the Head Office offered RMB bonds totaling RMB2.5 billion in Hong Kong and eight issues of interbank CDs totaling RMB10,640 million in the domestic interbank market.

[Channel Development]
At the end of 2014, the Bank had a total of 17,460 institutions, of which there were 17,122 domestic institutions and 338 overseas ones. Domestic institutions include the Head Office, 31 tier-one branches, 5 branches directly controlled by the Head Office, 26 banking offices of tier-ne branches, 403 tier-two branches, 3,081 tier-one sub-branches, 13,467 outlets, 30 Head Office-level profitability units along with their directly controlled-institutions and branches, and 78 major subsidiaries and their branches.

Based on the e-ICBC strategy, the Bank closely followed the trend of mobile, personalized and intelligent banking, intensified innovation and application of E-banking products and services, and stepped up to build an integrated and open E-banking platform. It continued to build the overseas E-banking channel, and launched overseas products such as trade finance of overseas corporate Internet banking and corporate Internet banking cross-border authorization, basically completing global distribution of overseas E-banking business. The transaction volume of E-banking topped RMB400 trillion. The number of E-banking transactions accounted for 86.0% of total transactions of the Bank, representing an increase of 5.8 percentage points from the previous year.

Internet Banking
The Bank further enriched its Internet banking product lines. Innovative products, including simplified version of personal Internet banking, electronic lottery and corporate B2B settlement-backed electronic bills, were launched to solidify the core competitive edge of Internet banking. At the end of 2014, personal Internet banking customers broke the record of 180 million. The Bank was named the “Best Corporate/Institutional Internet Bank in China” by Global Finance for the fourth time.

Telephone Banking
The Bank optimized the self-service menu of telephone banking, and set up an information management platform for customer service centers, shaping a management system with a full range of functions and intelligent services. It also upgraded the self-service voice service of telephone banking, strengthened customer diversion from staff service and interchannel development, and enhanced the value creation capacity of telephone banking. Furthermore, the Bank expanded customer service channels, resulting in a year-on-year growth of 136% in daily average business volume of SMS banking and WeChat banking, as well as more convenient and efficient services offered.

Mobile Banking
The Bank continuously enriched business features of mobile banking, launching credit card application, remittance to any mobile phone number and other distinctive services. More application scenarios for mobile life were added to mobile banking, and emerging applications were brought in such as car rental and medical care. The Bank also upgraded the safety of mobile banking products, optimized user interactive interface and improved customer experience. At the end of 2014, the number of mobile banking customers increased by 33.6% from the end of the previous year.

Self-service Banking
The Bank intensified its efforts in self-service development, achieving initial results in intelligent service. Emerging areas including commodity trading market and key counties were mainly selected to extend service channels. The Bank optimized the transaction process of self-service terminals and increased new agent sales business of personal insurance. The Bank made intellectualized reconstruction to some outlets, and handled cash and non-cash businesses of outlets by the humancomputer interaction mode. At the end of 2014, the Bank owned 25,861 self-service banking outlets, representing an increase of 18.5% from the end of the previous year, and 92,319 ATMs, up by 14.7%. The volume of ATM transactions amounted to RMB10,852.4 billion, up by 23.5% from the previous year.

[Internationalized and Diversified Operation]
The Bank steadily advanced internationalized and diversified operation and development, and stepped up its financial support to “Going Global” enterprises, “One Belt and One Road” construction and RMB internationalization. Following Singapore Branch, Luxembourg Branch, Doha Branch and ICBC (Canada) successively obtained authorization from PBC to act as RMB business clearing banks in local countries and regions. Hence, the Bank became the first financial institution with RMB clearing banks across Asian, European and American time zones. Its RMB clearing network covered 75 countries and regions around the world. In 2014, the volume for cross-border RMB business reached RMB3.66 trillion, increasing by 65.7% over the previous year.

At the end of 2014, the Bank established 338 institutions in 41 countries and regions and indirectly covered 20 African countries as a shareholder of Standard Bank Group. The Bank also established correspondent banking relationships with 1,809 overseas banking institutions in 147 countries and regions, making its service network covering six continents and important international finance centers around the world.

As at the end of 2014, total assets of overseas institutions (including overseas branches, subsidiaries and investments in Standard Bank) of the Bank were USD235,996 million, an increase of USD26,833 million or 12.8% from the end of the previous year, and they accounted for 7.1% of the Group’s total assets, representing an increase of 0.4 percentage points. Total loans amounted to USD130,983 million, rising by USD22,862 million or 21.1%, and total deposits were USD92,449 million, indicating an increase of USD17,699 million or 23.7%. Profit before tax during the reporting period was USD3,023 million, increasing by 35.4% compared with the previous year.

Comprehensive subsidiaries delivered stronger profit contributions and strategic synergies to the Group. ICBC Credit Suisse Asset Management remarkably elevated its size of funds under management, achieving balanced growth in both size and benefits. ICBC Leasing insisted on serving the real economy and consolidated its leading position in the industry. ICBC-AXA seized the market development opportunity in life insurance, taking its profitability into a higher level. ICBC International proactively promoted large-sized transnational companies and domestic enterprises listing in Hong Kong, further stabilizing its profit structure.

IT-based Banking Development
The Bank continued to improve the “big data” basis for IT-based banking development, inputted data of financial market, e-commerce platform and comprehensive subsidiaries into data warehouse, and incorporated personal Internet banking logs and other unstructured data into the Group’s database. It strengthened data analysis mining and application in terms of e-commerce, risk management, precision marketing and product classification. It integrated business handling process, continued to improve uniform view of customer information and optimized the customer-oriented marketing assessment system. It also perfected the financial asset service system constantly and realized management on asset investment and operation throughout the complete process. Furthermore, the Bank advanced the system building in respect of international and diversified operations with FOVA covering 38 overseas institutions, and accomplished comprehensive business system development in ICBC-AXA, ICBC Credit Suisse Investment Management and other subsidiaries.

The information system maintained stable operation. Among the domestic financial peers, the Bank took the lead in switching operation of city-wide host systems in two technical parks within several minutes, and transformed from traditional disaster recovery mode to dual-center parallel mode, to ensure the around-the-clock operation of global business in an all-round manner. It continued to build the group-wide daily administrative mechanism on information security and conducted tiered authorization and protection to information. By utilizing the cryptographic algorithm under national security review, the Bank reformed the financial IC card, mobile payment and other application systems, enhanced its controllability on information security protection and reinforced security protection measures for customer service system.

In 2014, the Bank obtained 50 patents from the State Intellectual Property Office, and the total number of patents owned by the Bank increased to 357.

Risk Management
To cope with increasing challenges for risk management under the new normal in the economy, the Bank proactively promoted innovative means of management with a move to toughen its precautionary measures for risk control and further the stability of its asset quality. The Bank continued to reinforce credit asset quality management, enhance NPL management, recovery and disposal, and maintain stable credit asset quality on the whole. As at the end of 2014, the Bank’s non-performing loan (NPL) ratio stood at 1.13%, a slight increase of 0.19 percentage points over the end of 2013. Asset quality remained at a favourable level as compared with its peers both domestically and globally. The allowance to NPL of the Bank was 206.9%, a top level among international banks.

The Bank highlighted the improvement of corporate governance as a key move in responding to the challenges and opportunities under the new normal in economic development. The Bank accommodated to supervisory requirements on Global Systemically Important Banks, intensified the duty performance and effective checks and balances mechanism of the Shareholders’ General Meeting, the Board of Directors, the Board of Supervisors and the Senior Management, and boosted the healthy development of the Group in an all-around manner. In 2014, the Bank received various important domestic and overseas corporate awards, including the “Platinum Award for All-Round Excellence” by The Asset, the Citation for Corporate Governance Disclosure by The Hong Kong Management Association and the “Icon on Corporate Governance” by the Corporate Governance Asia.

Enterprise risk management is a process where the Board of Directors, the Senior Management and other employees of the Bank perform their respective duties and responsibilities to take effective control of all the risks at various business levels in order to provide reasonable guarantee to the achievement of objectives of the Bank. The principles of risk management include matching return with risk, internal check and balance with consideration as to efficiency, risk diversification, combination of quantitative and qualitative analysis, dynamic adaptability adjustments and gradual improvement, etc.

In 2014, the Bank further improved the enterprise risk management system, proactively implemented domestic and overseas regulatory requirements on systemically important banks, strengthened the development of enterprise risk management regulations, and further strengthened the risk appetite and risk limit management system. It reinforced consolidated risk management at the Group level, with the focus on risk management of non-banking subsidiaries. It also reinforced country risk management and strengthened country risk monitoring and reporting and limit management. The Bank also propelled the implementation of advanced capital management approaches and improved the measurement system, system development and management application concerning credit risk, market risk and operational risk. Accordingly, the Bank
further improved the level of its enterprise risk management.

Social Responsibility
Taking “providing outstanding financial services — excellent services to customers, maximum returns to shareholders, real success for our people and great contribution to society” as its mission, the Bank has been dedicated to meeting the general appeal of economic and social development and serving the overall economic growth and social progress in a sustainable way. The Bank gained extensive social recognition by its good performance in social responsibility fulfillment, and successively won various awards, including “Best Social Responsibility Financial Institution Award”, “Most Respectable Enterprise in China” and “Most Responsible Enterprise”.

The Bank closely connected its sustainable development with the fulfillment of social responsibility and devotion to public welfare and charity. It was committed to developing ICBC into a brand that is known for its caring about society by involving in disaster relief, poverty alleviation, environmental protection, volunteer services and other public welfare efforts, as well as creating a corporate culture that attaches great importance to public welfare. The Bank actively participated in disaster relief and donated RMB5.00 million to the earthquake-stricken Ludian County. It also created a green financial service channel to ensure efficient operation of the fund transfer and settlement system, to meet the financial service demand of post-disaster reconstruction. It input poverty alleviation fund over RMB11.00 million to build new dormitory buildings, reward excellent village teachers, support outstanding college students from lowincome families and develop infrastructure construction projects in local education and health care sectors, which gave strong support to economic growth and farmers’ income increase in designated poverty alleviation areas. In addition, the Bank organized a series of themed public welfare activities including “Pursuit of Dreams — Schoolbag Donation Program for the Blind”.