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ICBC Releases the H1 2019 Results
 
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On August 29 2019, Industrial and Commercial Bank of China (stock code: SH: 601398; HK: 1398) published its results for the first half of 2019. The interim report shows that, ICBC made a steady and sound improvement in its operations in the first half of 2019.

I. Profits enjoyed a stable growth. In accordance with International Financial Reporting Standards (IFRS), ICBC recorded net profits of RMB168.69 billion in H1 2019, with a year-on-year increase of 5% and profit before provision (reflecting growth potential) of RMB308.4 billion, with a year-on-year increase of 9.9%. Operating income witnessed a year-on-year increase of 9.1%. Against the backdrop of more fee cut for the real economy, ICBC saw a year-on-year increase of 11.7% in net fee and commission income by deepening product and service innovation.

II. More targeted services were provided for the real economy.

First, ICBC adhered to steady and balanced credit lending. In the first half of 2019, domestic RMB loans increased by RMB851.3 billion. Non-credit financing and investment in local government bonds increased by RMB450.7 billion.

Second, ICBC focused on the needs of key projects related to national welfare and people’s livelihood. Loans to domestic projects increased by RMB253.7 billion year to date, accounting for 54.9% of the new corporate loans. The bank strongly supported such key projects as the coordinated development of Beijing, Tianjin and Hebei, Xiong’an New Area, Guangdong-Hong Kong-Macau Greater Bay Area, Integration of the Yangtze River Delta and the Belt and Road Initiative. The balance of loans took the lead in the transportation, public facilities, energy, manufacturing and service sector.

Third, ICBC focused on the efficiency and quality improvement of inclusive finance development. Inclusive finance loans for small and micro businesses increased by RMB130.1 billion from the year beginning, with a growth rate above 40%. The interest rates of newly issued inclusive finance loans were low in the market. Loans to private enterprises rose by RMB134 billion or 7.6% over the beginning of the year. Loans for targeted poverty alleviation rose by RMB18.4 billion or 12.5% compared with early 2019.

Fourth, ICBC focused on supply-side structural reform and new growth drivers. Loans to state-of-the-art manufacturing sector rose by RMB47 billion year to date. The balance of loans to domestic manufacturing reached RMB1.43 trillion, leading the banking sector. Loans to the service sector increased by RMB54 billion, mainly covering health, education, senior care and culture industry. The ICBC was among the first batch of financial companies to issue mutual funds of Science and Technology Innovation Board, in order to better serve "Innovation and Entrepreneurship" and technical innovation.

III. Business vitality and market competitiveness continued to improve.

First, ICBC thoroughly implemented the strategy of "serving the broadest customer base". In the first half of 2019, total number of individual customers hit 627 million. Personal mobile banking users grew more than 20 million year to date to 333 million. Corporate settlement accounts rose to 8.98 million. Relying on customer base and better service, customer deposits rallied RMB1.72 trillion, topping the market.

Second, ICBC further expanded the new driving forces for growth. Contribution of “Mega Retail” business to operating income continued to grow. The bank steadily pressed ahead with asset management business transformation, and incomes from emerging businesses such as investment banking, syndicated loans, bond underwriting and account transactions grew rapidly. In the first half of 2019, domestic bonds in which ICBC acted as a leading underwriter amounted to RMB728.3 billion, maintaining the leading position in the market. ICBC Wealth Management Co., Ltd. was among the first batch of financial institutions to be granted with business license, while ICBC Technology Co., Ltd. successfully settled in Xiong’an New Area.

Third, ICBC further promoted integration of technology and business. ICBC sped up the implementation of the two innovation projects, namely the ECOS and e-ICBC 3.0. ICBC launched a number of new products and services (such as Happy Life Version of mobile banking) for middle-aged and elderly customers. It created more than 1,000 high-quality service scenarios, covering production and operation, consumption, service and other major areas, and serving hundreds of millions of users. By the end of June, the number of internet finance customers reached 460 million. In the first half of 2019, online financial transactions amounted to around RMB311 trillion, accounting for 98% of total transactions in the sector.

IV. The risk control and management foundation was further consolidated.

First, ICBC deepened the "foundation consolidation" project of asset quality. The NPL ratio dropped 4BP from the beginning of the year to 1.48%, marking a decline for 10 consecutive quarters. The scissors difference and financing with potential risks have declined for 12 consecutive quarters. Financing with potential risks fell RMB33 billion from the beginning of the year. Coverage ratio rose 16 percent from the beginning of the year to 192%, further strengthening the risk resistance capability. RMB92 billion  NPLs were collected and disposed of, ranking the first in the banking sector.

Second, ICBC improved complete risk management system. It established a crossover risk monitoring platform and a platform for monitoring the Group's investment and financing risks, tightening control over crossover risks (such as cross-market, cross-region, cross-institution and cross-product), and implementing penetration management on subsidiaries. The NPL ratio of new loans since 2013 stayed at 0.86%. It carried out the "responsibility year" campaign for internal control and compliance, deepening risk governance in key areas and pushing forward the building of the long-term mechanism for overseas compliance management.

V. Corporate governance was enhanced, and team building was further promoted. ICBC continuously enhanced and gave full play to corporate governance advantages by extensively implementing the strategy of "developing and reinvigorating ICBC through human resources", and endeavored to convert corporate governance and talent advantages into innovation, development and competitiveness advantages. It further improved the leader performance appraisal system, optimized staff structure and intensified staff training to build high-quality professional teams. Depending on the two drivers of young leader cultivation and key talent pool, it gathered HR, cohesiveness and momentum to establish a HR foundation and foster a corporate culture for sustainable development.


(2019-08-30)
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