Public company info - Industrial and Commercial Bank of China (Asia) Ltd. , 00349.HK
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Industrial and Commercial Bank of China (Asia) Ltd., 00349.HK - Company Profile
Chairman JIANG Jianqing
Share Issued (share) 1,352,000,000
Par Currency Hong Kong Dollar
Par Value 2.0
Industry Banks
Corporate Profile Business Summary: The Group comprises seven operating segments. Commercial banking represents commercial lending and trade financing. Retail banking represents retail banking, hire purchase and leasing, and credit card business. Global markets and trading represents foreign exchange, money market and capital market activities. Corporate and investment banking mainly comprise corporate banking, the provision of debt capital market and investment banking. Institutional banking represents financial institution business. Chinese Mercantile Bank represents our subsidiary business in Mainland China. Unallocated items mainly comprise the central management unit, bank premises and any items which cannot be reasonably allocated to specific operating segments. Business Review and Prospects: RETAIL BANKING The performance of our Retail Banking business gradually improved during 2009, although we encountered some difficulties in the beginning of the year. Profit contribution from our Retail Banking business increased slightly to HK$220 million as compared to HK$179 million in 2008, after an one-off provision for operating loss resulting from the sale of Lehman Brothers related products of approximately HK$89 million. There was a remarkable rebound in the property market in Hong Kong during 2009, both in terms of property prices and transaction volume. At the same time, local banks continued to compete aggressively among each other by offering various kinds of attractive mortgage loan plans with a view to expand their respective market share. We focused on offering mainly HIBOR-based mortgage loan plans, and coupled with well-designed promotional offer, we were able to grow our mortgage loan portfolio during 2009 by approximately 20% as compared to the end of 2008. We achieved a steady growth in our customers’ deposits for our branch network during 2009, notwithstanding a slight decline toward the end of the year due to the seasonality factor. As a result of the low interest rate environment throughout the year, profit margin for our deposit business remained thin. During 2009, we continued our branch network rationalisation projects. Our Tai Po Branch was relocated to the central area of Tai Po Market in September. We opened a new branch in Wong Tai Sin in December, which brings the total number of our branches to 44. During 2009, we strengthened our cooperation with ICBC in connection with account opening witnessing service for new customers in Shenzhen by leveraging on the strong ICBC network there. Such service allows customers of ICBC to opening bank accounts with our bank on the spot through witnessing service provided by staff of designated ICBC branches in Shenzhen. With dedicated promotional effort and corresponding improvement in processing workflow, the development of our customer acquisition plan through referral from ICBC was satisfactory. Different promotions had been run throughout the year to acquire high net worth customers to enroll in our Elite Club banking service, which resulted in a continuous growth of customers in 2009. The other important developments of our Retail Banking business during the year are summarised as follows: Securities and brokerage We achieved considerable success in strengthening our securities and brokerage business during 2009, as reflected by the increase in both the level of commission income and our market share as compared to 2008. That was attributed mainly to the general recovery of the stock market in Hong Kong, as well as the broadening of our customer base including both retail and institutional clients. Wealth Management Following the changes in banking regulations in Hong Kong relating to the sale of investment products, we experienced a general slow-down in our wealth management business. In order to overcome partly such adverse factor, we continued to streamline our cross-selling mechanism with a view to further expand our Elite Club business. Through the cooperation with our asset management business, we were able to remarkably increase our sale volume for unit trust products by actively marketing our own brand of investment fund products since their inaugural launch in August 2009. Private Banking We continued to provide high quality private banking services to our privileged customers in Hong Kong, which resulted in a steady growth of the size of assets under management. At the same time, we also strengthened the cross-border cooperation with a number of major branches of ICBC on private banking business by introducing our products and services as well as exchanging knowledge on business practice. Bancassurance During the first half of 2009, we focused on the sale of endowment insurance products in view of the persistent risk adverse attitude of customers. Since the mid of 2009, sales of investment-linked insurance products started to increase, in line with improvement in the overall investment climate. As a result, sales of life insurance products recorded a remarkable growth in 2009. Hire Purchase and Leasing As a result of the favourable funding cost situation prevailing during 2009, our hire purchase and leasing business recorded a higher profit as compared to 2008. In addition, we were able to expand our loan portfolio for taxi and public light bus financing, which resulted in a slight increase in our market share. The outlook of our Retail Banking business for 2010 is summarised below: In view of the general recovery in the local economy, we expect that the performance of our Retail Banking business will continue to improve. More concrete effort will be put to strengthen our Retail Banking operation in order to reinforce our overall market position in Hong Kong. We intend to further enlarge our mortgage portfolio in the coming year. In order to achieve that goal, we shall launch different kinds of mortgage loan plans to meet customers’ requirements including fixed-rate mortgage loans. Also, we shall monitor closely the market situation and shall make appropriate adjustments in product design and pricing so as to compete proactively for new mortgage business. In order to expand our customer base, we shall continue our branch network rationalisation and expansion projects. We shall open new branches in those locations where we do not have coverage at the moment. Some of the existing branches will also be renovated or relocated. In addition, more segment-oriented banking products will be launched to support our customer acquisition strategy. GLOBAL MARKETS & TRADING Profit contribution from our Global Markets and Trading business amounted to HK$516 million as compared to a loss of HK$389 million in 2008. Since the outbreak of the financial crisis in late 2008 and the resulting change in investment climate, we focused on the marketing of traditional treasury products, such as foreign exchange business and currency-linked deposits etc., in order to better serve the demand of our customers. Cross referral mechanism with other business departments of the Bank also resulted in increased transaction volume for our treasury market business. Our relationship with ICBC contributed to the continuous expansion in the customer base for our treasury market business. Through our strong parentage, we also strengthened our market making capability for RMB in preparation for further relaxation on RMB banking business in Hong Kong. In line with the gradual recovery of the world economy and the narrowing of credit spreads, the performance of our bond portfolio improved considerably. In addition, in view of the change in market environment, we have recently established a structured products team to enhance our ability of pricing and managing such products. Furthermore, we shall continue our effort on the improvement of risk assessment and control by bringing in advanced technology that will assist us in the upgrade of market risk analysis and monitoring. COMMERCIAL BANKING Our Commercial Banking business picked up the momentum to grow, along with the gradual recovery of the global and local economy, which benefited the small and medium-sized enterprises (“SMEs”) in Hong Kong. Profit contribution from our Commercial Banking business amounted to HK$786 million, as compared to HK$503 million in 2008. In addition, we managed to maintain a loan impairment ratio below the average market level. Through the dedicated effort of our specialist teams, including European Banking, Diamond Trade Finance and India Banking, tailor-made banking and financial solutions were provided to our customers, which contributed satisfactorily to business growth. Also, we offered a number of new trade finance and factoring products in order to strengthen our market position for SME banking business. With the launch of pilot scheme for RMB cross-border trade settlement service in Hong Kong in July 2009, we captured such market opportunity by collaborating with ICBC and vigorously pursued for client acquisition. We are dedicated to provide comprehensive, effective and reliable cross-border banking services to enable our customers to minimise the cost and risk of currency exchange relating to trade settlement between Hong Kong and Mainland China. For 2010, we shall continue to strengthen our relationship management team as well as our product development team with a view to provide “one-stop” banking services to our customers. We shall further expand our non-interest income related businesses especially for those relating to IPOs, trade finance and treasury products. CORPORATE & INVESTMENT BANKING Our Corporate and Investment Banking business further expanded during 2009. Profit contribution surged to a new record level of HK$777 million, as compared to HK$497 million in 2008. To maximise the growth potential from certain strategic sectors, we reorganised our manpower by industry group so as to enhance our professional service and to offer innovative solutions to our clients. In particular, our aircraft and ship financing business recorded major achievement, including the completion of a Hong Kong tax efficient financing arrangement with a prominent local airline company. Syndication activities dramatically slowed down since the last quarter of 2008. However, we were able to maintain the momentum of our loan growth for syndicated loans, club deals and bilateral facilities. We were mandated lead arrangers for a few prominent syndicated loan transactions, namely HK$8 billion financing for the Henderson Land Group, US$5 billion multi-currency financing for International Petroleum Investment Company, HK$3 billion financing for The Link REIT, HK$1.225 billion term loan financing for HSH Financial Services, HK$1.95 billion financing for China Agri-Industries Holdings Ltd, HK$5.46 billion financing for Sino-Ocean Land and HK$1.56 billion financing for Minmetals Capitals. On the other hand, we experienced certain set back in our syndicated loan business for the Dubai market. To safeguard any possible deterioration in credit quality, we made a provision of around HK$100 million against our Dubai-related loan exposure. We shall continue to pursue further business expansion in 2010 and at the same time actively monitor the quality of our loan portfolio. INSTITUTIONAL BANKING Profit contribution from our Institutional Banking business amounted to HK$139 million, as compared to HK$293 million in 2008. There was a relatively significant decline in trade finance related business conducted in cooperation with various branches of ICBC as a result of a reducing demand from customers in Mainland China during the first half of 2009, but such business started to grow again in the second half of 2009. On the other hand, we continued to focus on broadening our customer base in Hong Kong, as well as enhancing the overall transactional banking services with particular emphasis on cash management for institutional clients. To better our marketing effort, we have divided our sales force into different teams and each team is responsible for developing tailor-made solutions to its targeted client segment. In 2010, we expect that the business volume of trade finance related products conducted in cooperation with ICBC will continue to grow. ASSET MANAGEMENT BUSINESS ICBC (Asia) Investment Management Company Limited, our wholly owned subsidiary, successfully launched its own series of investment funds under the “ICBC (Asia)” brand name in August 2009, comprising of: - China and Hong Kong Vision Fund (investing primarily in equities) - Asia Selection Growth Fund (investing primarily in equities) - Asia Infrastructure and Redevelopment Fund (investing primarily in equities) - Global Financial Opportunities Fund (investing primarily in equities) - Global Total Return Bond Fund To commensurate with the launch of such products, investment forums were held at most of our branches. Thereafter, we continued to provide after-sales support to the sales force of our Retail Banking business, including the provision of weekly and monthly investment commentaries. We aim to maximise cross-selling opportunities through closer cooperation between our Retail Banking network and our Asset Management arm. To further broaden our customer base, we intend to market our investment fund products through ICBC to both retail and institutional customers in Mainland China. CREDIT CARD BUSINESS Our Credit Card business achieved satisfactory results in 2009 both in terms of total revenue and outstanding borrowing as compared to the previous year. Loan delinquency, amidst the soaring number of bankruptcy cases, only showed a moderate increase. Such a result was due to effective strategy for marketing and stimulation of customer spending throughout the year and a change to aggressive card acquisition strategy as from the second half of 2009 under tightened credit control policies. Innovative products were developed, including the “1872 Golf Card”, with the unique feature of RMB280 green field fee, and the “Guangshen Railway Dual Currency Card”, the first CUP chip card in the Hong Kong market with contact-less payment feature. For merchant business, the performance was especially impressive with a growth rate of over 40%. Looking forward to 2010, we shall continue to stimulate customer spending, as well as a fine-tuning of marketing strategy. The direction of card promotion, marketing and advertising will ride on the cooperation with ICBC to tape our group synergy for merchant and utilisation supports in the Pearl River Delta Region, with particular emphasis on the “Guangshen Railway Dual Currency Card”. Sophisticated tools will be developed to monitor the evolution of the credit risk of the portfolio in response to the expansion of the card base, particularly for customers with revolving borrowing. Customer segmentation will be enhanced not only for marketing purpose but also for differentiated services. CHINESE MERCANTILE BANK In 2009, Chinese Mercantile Bank (“CMB”) suffered from declined performance due to the global financial crisis and aggressive loan growth strategy of other domestic banks in Mainland China, as well as an increase in provision for doubtful loans. According to Hong Kong accounting standards, net profit of CMB was HK$91 million for 2009, a decrease of HK$124 million or 58% as compared to 2008. Net interest income decreased by HK$38 million or 12% to HK$269 million as compared with HK$307 million in 2008. Net fee and commission income increased by HK$21 million or 66% to HK$53 million, as compared to HK$32 million in 2008. Total assets of CMB was HK$12,830 million as at 31 December 2009, representing an increase of 23% as compared to the end of 2008. Total customers’ loan and deposit balance as at 31 December 2009 was HK$9,538 million and HK$5,595 million respectively, representing increases of 8% and 33% respectively over the corresponding balances as at the end of 2008. CMB opened its Guangzhou Branch in January 2009, which is its first branch operating outside Shenzhen. Furthermore, the registered capital of CMB has been increased to RMB1.65 billion after the injection of additional capital. In 2010, CMB will continue to expand its business scope and scale, with an aim to provide comprehensive financial services for customers in Hong Kong and Mainland China. At the same time, more stringent control will be put in place to improve its loan asset quality.

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