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Good Progress in Business and Management Driven by Services and Innovation

ICBC Achieves Healthy and Sustainable Growth in 2012

 
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Given the profound change of the economic and financial landscape in China and globally since 2012, commercial banks face unprecedented challenges to move forward in line with the new situation, new issues arising from economic cycle, financial regulatory reform. Commercial banks in China have to show their resilience in profit model, business portfolio, management, innovation and competitive edge in order to ride against the higher capital constraint and faster pace of interest rate liberalization. Despite all these prevailing difficulties and challenges, ICBC remains committed to serving the development of real economy as the starting point for all businesses. By overseeing a transformation through further reform and innovation, in 2012 ICBC made steady progress in extending loans and maintained stable asset quality. The healthy, sustainable growth was marked by new breakthrough in financial services, business re-orientation, reform and innovation, risk management.

Consistent Improvement of Quality in Serving Real Economy

To a bank, serving real economy is an old topic but poses many new requirements. Last year, ICBC took off a program to speed up transformation to improve the quality and services to real economy in a bid to create a harmonious relationship between banks and real economy.

Extending loan is a business segment closely related to real economy. Under a principle of growing with the economy, ICBC builds up a loan portfolio with target structuring by providing loans to the right recipients, making sure the availability of credit facilities for real economy, key business segments and weak areas related to the national economic growth. ICBC loans provide a fillip to the economic restructuring and industry upgrade. To conclude, ICBC adopted the following five measures to support the development of real economy by extending loans.

I. Achieve a balanced portfolio by extending more loans to existing customers, improve the quality of services to real economy. 2012 data showed that ICBC has disbursed over RMB 600 billion in loans by recollecting back the loans and lending again. Over 95% of the loans were released to work-in-progress projects, follow-up projects invested by the government.

II. Fast progress in lending to advanced manufacturing sector, services sector, cultural companies and strategic emerging industries which are target industries for economic restructuring. New loans to these sectors accounted for 103% of all ICBC corporate loans. Take cultural sector as an example. ICBC's total outstanding loans to cultural companies reached RMB 103.2 billion as of end of 2012, an increase of RMB 37.2 billion in the year or 56.3%. At ICBC, cultural sector is one of the sectors with the highest rate of loan growth.

III. The consistent improvement of financial services to mid-range companies and micro-to-small enterprises (MSEs) resulted in 73% new ICBC corporate loans were new loans to mid-range companies and MSEs. Leveraging solid customer base, financial strength and business scale, ICBC expanded the finance services to support the growth of a large group of MSEs in the industry chain and industry clusters. Through just one product "Online Finance", last year ICBC provided RMB 328.8 billion loans to some 30,000 MSEs.

IV. On the back of robust growth, new personal loans accounting for 30% of all new loans provided a strong financial support to drive consumption and improve people's livelihood. By end of last year, ICBC was the first bank in China to register over RMB 2 trillion in total outstanding personal loan. Over one quarter of ICBC loans went to personal customers. To drive the urban and rural residents to spend more on expensive items, and meet their rising demand for spending on new items, ICBC personal loans are designed for them to buy cars for own use, also innovative personal loans for buying house furniture, cultural spending or overseas study.

V. Continue lending more support to midwestern and northeast China. Growth of new loans to these two regions were higher than the average growth of ICBC new loans for five years in a row, a driver to the coordinated growth of regional economy.

Significant Improvement in Financial Services to the Public

Being a large bank with over 300 million personal customers, financial services to the public has always been a major focus of ICBC to support and improve the everyday life of people. ICBC strives to be a bank satisfied by all. With this goal in mind, in 2012 ICBC took various measures to improve services under the theme "Satisfaction at ICBC" concentrating on the customer concern and needs. ICBC has made huge improvement in providing more and faster services by finding solutions to address the problems covering service supply, service steps, service innovation and service management.

In the upgrade of service channels, ICBC speeds up renovation of the conventional outlets for consistent service environment. ICBC also sets up outlets in buildings or MTR stations to answer the changing need of customers for greater accessibility of financial services. Besides, in these days of the Internet Age where people are relying on the web for work and living, ICBC continues to improve and shape new technology and services for customers to do their banking online anytime, anywhere via ICBC online service systems (Internet Banking, Telephone Banking, Mobile Banking, self-service devices). As of today, nearly 50% ICBC personal customers use Personal Internet Banking, nearly 70% ICBC corporate clients use Corporate Internet Banking. On top of this, ICBC has 15,000 self-service banking kiosks, 115,000 self-service devices and over 950,000 POS. Last year, more than 37 billion transactions were conducted online amounting to RMB 333 trillion. Today, three out of every 4 transactions accepted by ICBC are processed online.

In service model and process innovation, ICBC launched a customer-focused program that involved business process restructuring and upgrade. Operation mode and business workflow at the back office were re-engineered to an intensive business processing mode. ICBC decomposes each service step, analyses and evaluates service details so that service flows for customers are more efficient and reasonable. By adding new product functions and re-engineering the steps, 533 issues that affect service efficiency have been resolved. Owing to the consistent effort on process re-engineering, the average processing time taken by each service was 20% faster despite the percentage of complex services handled by ICBC outlets has been significantly increased.

In the upgrade of service quality, ICBC focuses on the "long queue", a salient issue that affects customer service and experience. With an aim to "Let customers queue up one time less, let customers wait one minute less", the Bank embarked a range of programs to look for the best solution. An example, the peak period for customers to queue up is the disbursement of pension fund during banking hours. By way of information technology, ICBC monitors the outlet traffic in real-time. Special service counters for the disbursement of pension fund, more staff at the banking hall and more services at self-service devices are the measures taken to let customers spending less time queuing up. Through these efforts, the "long queue" at ICBC outlets has been properly relieved. Both ratios of customers and outlets spending overtime in the queue went down. The average time taken by the customers waiting in a queue when compared to the beginning of the year has been shortened nearly one-third.

Growth Driven by Reform and Innovation

Reform and innovation remain a strategic measures of ICBC to increase competitive edge. In 2012, ICBC embarked on a sustain campaign on innovation in different areas including rules, systems, services, technologies and products. A modern, integrated, international service scheme has been in place demonstrated by fast transformation, strong momentum, more competitive core products and stronger technological leadership.

In service innovation, continuing the stable progress in intermediary business, last year ICBC took financial asset service as a key strategic service for the Bank to change course. Financial asset service occupies less capital with high value-added and in great demand by customers. Revenue generated from financial asset service surged drastically. Fast growth in M&A services, equity finance and financial advisory to top customers resulted in 1.6 times more revenue generated over previous year. At the end of 2012, net value of assets under ICBC custody reached RMB 3.96 trillion, a 12% increase over end of previous year and ranking No.1 in domestic league table for 15 years in a row. ICBC is the largest card issuer in Asia Pacific in terms of card issuance volume and cardholder expenditure volume. Today, ICBC is one of the four largest card issuing banks in the world. Meanwhile, ICBC also made huge inroads in building a global footprint. In 2012, ICBC set up seven branches outside China through new application or acquisition. The acquisition of Bank of East Asia was the first acquisition of a controlling stake in a U.S. commercial bank by a Chinese bank. The acquisition of Standard Bank Argentina marked for the first time that a Chinese bank acquired a mainstream commercial bank outside China. At present, ICBC's global service network covers nearly 400 branches spanning 39 countries/territories.

In IT innovation, ICBC's fourth generation core IT system started in 2008 was online last year. This marked a major breakthrough for the Bank in setting up systems for emerging services encompassing mobile banking, financial IC card, global market operation, private banking, precious metals, investment banking and cash management. Besides greatly upgrading the services, ICBC's fourth generation core IT system is a good platform for product innovation in related business segments, offering financial products with more powerful functions to the customers in the days ahead.

In product innovation, last year ICBC rolled out nearly a thousand innovative applications, adding to a total of over 4,000 products customized to the needs of customers. Among all the banks in China, ICBC offers the widest, most complete range of products. ICBC's product innovations not only offer more financial products for customers to choose, but also play a major role to increase income for urban residents, address the issues of people's everyday life, improve the living standard, and support business to grow. Global cash management, online supply chain finance and "Collection Manager" represent a wide range of innovative products tailored to the needs of customers. These services are significant in addressing the funding gap of companies, reducing their financial cost and improving business efficiency. The launch and promotion of chip cards, Easy Loan credit cards provides more reliable and faster services for all to spend and pay. SMS Banking, Mobile Banking (WAP), iPhone Banking, Android Banking, iPad Banking, Personal Internet Banking for different browsers (Microsoft, Apple, Firefox, Google), personal banking apps for Window 8 tablet PCs are an array of new mobile financial products to cater to the need of convenient banking services at this time of mobile internet era.


(2013-02-01)
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