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INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED

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Industrial and Commercial Bank of China : ICBC Makes a Good Start in the First Half of 2021

08/27/2021 | 07:52am EDT

Industrial and Commercial Bank of China (ICBC) (stock code: SH: 601398; HK: 1398) disclosed its operating results for the first half of 2021 on August 27, 2021. While maintaining a good momentum of steady growth in operation, ICBC delivered an interim results which were better than expected and than that of the same period of last year.

I. Maintaining Stable Operation Fundamentals and Showing the Efficacy of High-Quality Development

As per the International Financial Reporting Standards, ICBC recorded an operating income of RMB426.4 billion in the first half year, representing a year-on-year increase of 6%, a net profit before provision of RMB332.6 billion, representing a year-on-year increase of 5.7%, and a net profit of RMB164.5 billion, representing a year-on-year increase of 9.8%. The NPL ratio of the Group was 1.54%, down 0.04 percentage points from the end of the previous year. The provision coverage ratio was 191.97%, up 11.29 percentage points from the end of the previous year. The capital adequacy ratio was 17.01%, up 0.13 percentage points from the end of the previous year. The return on average total assets and return on weighted average equity reflecting the profitability and the operation management level were better than those in the same period of the previous year. ICBC was ranked 1st place among the Forbes Global 2000 for the ninth consecutive year and took 1st place among the Top 500 Banking Brands of Brand Finance for the fifth consecutive year.

II. Facilitating Stable Economic Recovery via High-Quality Financial Services

The total amount of investment and financing grew reasonably. In the first half year, ICBC was ranked top in terms of new loans and the increment of bond investments among financial institutions. Total loans rose by nearly RMB1.4 trillion, representing an increase of 7.4%. The net increase in bond investments reached RMB318.6 billion, and the amount of the debt financing instruments of non-financial enterprises with ICBC as the lead underwriter was the highest on the market.

Funds were channeled into key areas and weaknesses in the real economy in a targeted manner. In the first half year, ICBC saw an increase of 9% in its project loans, mainly supporting major projects of the 14th Five-Year Plan and other projects making up for weaknesses. In the high-tech area mainly supported by the state, ICBC's loan balance exceeded RMB1 trillion. Moreover, ICBC issued the first carbon neutrality bond and granted the first loan secured by the carbon emission right, whose green loan balance exceeded RMB2 trillion, remaining a leader among peers. Also, ICBC continued to increase the percentage of loans granted to manufacturing, especially medium- and long-term manufacturing loans, with the largest scale of such loans among peers. Inclusive small and micro enterprise loans grew by more than 40% over the year beginning, which was beyond the regulatory requirements. The comprehensive financing cost of small and micro enterprises further dropped by 56bps compared with that in 2020.

ICBC was actively engaged in the strategy for coordinated development between regions. Focused on the coordinated development in the Beijing-Tianjin-Hebei region, the integrated development of the Yangtze River Delta, the Guangdong-Hong Kong-Macao Greater Bay Area, the rise of the Central Region, and the double-city economic circle in Chengdu and Chongqing, ICBC offered stronger financial support. As at the end of June, ICBC's total balance of loans granted to the aforesaid five major regions exceeded RMB13 trillion. Meanwhile, ICBC further enabled central cities and urban agglomerations to drive the development of other regions, facilitated the cross-regional allocation of factors such as capital, talent, technology and knowledge, and supported common prosperity in a wider range.

ICBC facilitated coordinated development between urban and rural areas to support rural revitalization. In the first half year, ICBC issued the Action Plan of ICBC for Finance-backed Rural Revitalization and launched the 'ICBC 'Xingnongtong'' brand to empower the financial development in rural areas. As at the end of June, ICBC's balance of agriculture-related loans exceeded RMB2.5 trillion. In total, the bank underwrote rural revitalization bonds of RMB15.6 billion, implemented more than 150 agriculture-related industrial chains and supply chains, granting financing of nearly RMB10 billion to companies and rural households on the chains. ICBC's offline channels covered more than 85% of counties in China. It innovatively built 'Digital Villages', a comprehensive service platform used to provide integrated services for counties and villages in more than 180 prefectures nationwide. Meanwhile, ICBC consolidated the results of poverty alleviation, strengthened financial support including industrial support, employment support and support after poverty alleviation relocation, aiming to promote common prosperity among farmers and in rural areas.

ICBC continued to implement the fee reduction and profit concession policies in favor of the real economy. Considering the economic impact and the operational difficulties of some enterprises caused by COVID-19, ICBC supported the real economy as always by taking measures to reduce fees of and surrender partial profits to enterprises, including reducing and exempting fees and interests, and postponing repayment. In the first half year, the interest rate of newly granted loans declined by 13bps compared with that in 2020. Meanwhile, the handling fees alone were decreased by over RMB20 billion.

ICBC efficiently supported Henan and other regions to fight against floods. On hearing of the floods in Henan and other regions, ICBC immediately planned to support local companies in terms of flood control and disaster relief. It has granted more than RMB13 billion loans to Henan for controlling the floods and granted accumulatively more than RMB3 billion special loans to local small and micro enterprises and privately owned businesses.

III. Continuing to Promote the Transition and Innovation and Accelerating the Formation of New Development Drivers

ICBC continued to provide more benefits and convenience for people. Adhering to the people-oriented financial feature, ICBC continued to promote the 'No. 1 Personal Bank' strategy to better meet the people's needs for a better life. As at the end of June, ICBC recorded personal financial assets of RMB16.6 trillion, remaining a leader on the market. With nearly 700 million personal customers, ICBC served nearly half of the population across the country. In terms of personal mobile banking, ICBC continued to lead in the total number of customers, the increment of customers and the average monthly active users (MAU). It accelerated the integration of diversified business chains including banking, wealth management, funds and insurance to create a competitive and sustainable wealth management model and to manage wealth for the people.

ICBC accelerated building itself into a bank strong on technology. In the regulatory rating of banking technology by the CBIRC, ICBC was ranked first for the eighth consecutive year. Meanwhile, in the first half year, ICBC kept making breakthroughs in technological R&D and application, as well as the system and mechanism for technological innovation. It formulated a new plan for FinTech development based on studies, aiming to build itself into a strong bank of technology driven by the two wheels of technological independence and digital transformation. ICBC took the lead in launching 'Cloud ICBC', a non-contacting service brand, further increasing the share of internet finance to 98.8%. Also, ICBC vigorously conducted piloting of the e-CNY business, covering transportation and travel, people's livelihood and consumption, health care, culture, entertainment and education, charity and poverty alleviation, digital government affairs, catering and restaurants, and financial business.

ICBC continued to improve its global financial service capabilities. In the first half year, ICBC Panama Branch was officially open. Hence, its overseas network covered 49 countries and regions, including 125 branch institutions in 21 countries and regions along the Belt and Road. Moreover, ICBC upgraded its 'Chunrong Action' in support of foreign trade and foreign capital. In the first six months this year, it granted financing of more than RMB680 billion in local and foreign currencies to key customers of foreign trade and foreign capital as well as their upstream and downstream enterprises. In addition, it provided more convenient services and innovatively rolled out supporting financial service functions, such as the 'import letter of credit' and the 'electronic letter of guarantee of consolidated tax collection' at the 'single window' of customs.

IV. Preventing and Mitigating Risks via High-Quality Control to Keep Risk Response Ahead of Market Curve

ICBC continued to optimize its comprehensive risk management system. Combining development with security, ICBC strengthened its risk management system according to the risk governance path of 'active prevention, smart control and comprehensive management'. It endeavored to prevent and mitigate existing/new and traditional/nontraditional risks. Moreover, ICBC strengthened control over emerging risks such as climate risk and model risk, and took the initiative to cope with the fluctuations in the global financial market. As a result, all kinds of risks were generally under control. In the first half year, the overdue loans, the overdue ratio, the special-mention loans and the ratio of special-mention loans of ICBC declined over the year beginning. Meanwhile, the price scissors between overdue loans and NPLs dropped to a record low, remaining negative for the fifth consecutive quarter, which symbolizes that ICBC has effectively contained the rebounding trend in the NPL ratio since the outbreak of COVID-19 last year.

ICBC advanced three-dimensional and intelligent credit risk control. Specifically, ICBC kept making its risk control more digital and intelligent. ICBC implemented new rules for credit approval at all domestic branches, and the mechanism for risk accountability to enhance the rigid executive force of risk management. It continued to strengthen risk removal and mitigation, as well as forward-looking risk identification and prevention. As at the end of June, the special-mention loans of ICBC decreased by RMB26.5 billion over the year beginning, in which both total amount and percentage of potential risk loans declined

Next, ICBC will continue to uphold the people-centric development concept, deeply explore the path of innovative development, offer financial services that are more adaptive, competitive and inclusive, and make financial services more balanced and coordinated. It will help facilitate high-quality economic and social development and common prosperity of the people through excellent financial services.

Disclaimer

ICBC - Industrial and Commercial Bank of China Limited published this content on 27 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 August 2021 11:51:06 UTC.


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Sales 2021 853 B 134 B 134 B
Net income 2021 329 B 51 458 M 51 458 M
Net Debt 2021 - - -
P/E ratio 2021 4,70x
Yield 2021 6,53%
Capitalization 1 905 B 245 B 298 B
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