On August 30, 2024, Industrial and Commercial Bank of China (Stock Code SH: 601398; HK: 1398) announced its results for the first half of 2024. Since the beginning of this year, ICBC has accelerated the “five transformations” of intelligent risk control, modern layout, digital driver, diversified structure and ecological foundation, playing the role of the main force in consolidating and strengthening the economic recovery. The Bank has manifested steady performance of main operating indicators and made solid progress in pursuit of high-quality development.

Under the International Financial Reporting Standards (IFRS), ICBC saw its assets, capital and funds more balanced and coordinated in the first half of 2024, continued soundness of “Strong, Excellent and Large” core indicators and growing resilience of operations. Operating income was RMB402 billion and net profit RMB171.3 billion. Return on average total assets (ROA) and return on weighted average equity (ROE) were 0.75% and 9.53%, respectively. The Bank issued the first TLAC non-capital bond in China with a capital adequacy ratio of 19.16%. Non-performing loans ratio stood at 1.35%, down 0.01 percentage points from the beginning of the year. Allowance to NPLs was 218.43%, up 4.46 percentage points from the beginning of the year, and the total balance of allowances exceeded RMB950 billion, further enhancing resilience to risks. The Bank has remained in the first place of the Top 1000 World Banks ranking for 12 years in a row.

As proposed by the Board of Directors, ICBC plans to distribute interim cash dividend for the first time. The total expected interim dividend payout on ICBC’s ordinary shares in 2024 will be RMB51.1 billion, that is, RMB1.434 (pre-tax) for each ten shares. Cash dividend ratio is 30%, creating real value returns to shareholders.

Focusing on Modern Layout, Serving Continued Improvements in Quality and Performance of Real Economy

ICBC has continuously improved high-quality financial supply, and adhered to the development strategy of integrated investment and financing with a focus on the modernization of the business layout. The Bank has coordinated the aggregate with the structure, and the increment with the stock, of investment and financing in a bid to meet the financial needs of the real economy more accurately and effectively.

Funding for the real economy was stepped up. In the first half year, RMB loans of ICBC domestic branches increased by RMB1.74 trillion, or 7.1%. The balance of RMB bond investment increased by RMB1.09 trillion, and domestic lead underwritings of bonds were nearly RMB770 billion, still leading the market by either total size or growth of investment and financing.

The structure of investment and financing was better suited to the real economy. ICBC made solid efforts on the “Five Priorities” of technology finance, green finance, inclusive finance, pension finance and digital finance. Loans to manufacturing grew by 13%, loans to strategic emerging industries grew by 14.7%, green loans by 13.7% and inclusive loans by 21.5%, all outpacing the average growth of loans. The Bank endeavored to boost consumption and domestic demand, recording an increase of over RMB304 billion in personal consumption loans, personal business loans and credit card overdrafts. 

The Bank helped foster and develop new quality productive forces at a faster pace. With a focus on technological upgrading and equipment renewal projects, ICBC continued to step up lending to manufacturing, especially medium to long-term loans, to boost the high-end, intelligent and green development of manufacturing. The “Chunmiao Action” was further carried out to strengthen the lifecycle financing support for sci-tech enterprises. The Head Office set up a technology finance center, strengthened collaboration between “equities, loans, bonds and insurance”, and unleashed the leading role of technological innovation for the modern industry system. As at the end of June, loans to strategic emerging industries stood at RMB3.1 trillion, an increase of nearly RMB400 billion from the beginning of the year.

ICBC served coordinated regional development in a balanced and effective manner. Centering on the major regional development strategies of China, ICBC has kept rationalizing the regional financial layout and improved financial supply to meet the multi-tier, diverse financial needs of market players and financial consumers. The urban-rural collaborative development strategy was further implemented. As at the end of June, mobile banking and ICBC “Xingnongtong” App served more than 174 million online agriculture-related customers in aggregate. More than 4700 service points of rural inclusive finance were built, with the coverage rate of county outlets rising to 87%.

Intelligent Risk Control Advanced with All Risks Generally under Control

ICBC has firmly coordinated development with security, insisting on “early identification, warning, exposure, and resolution” of risks and following the path of “active prevention, smart control and comprehensive management”. The Bank implemented in depth the “Five-pronged Risk Management Approach”, namely the overall risk management of domestic and overseas institutions, on- and off-balance sheet businesses, commercial banking and investment banking and other services, online and offline business, and Head Office and subordinate institutions, to ensure security of development.

The quality of credit assets remained stable. ICBC continued to improve the smart credit risk control system and iteratively updated and applied new rules for credit approval to a high standard, serving as “critical valves” in asset quality management. The asset quality remained generally stable. By the end of June, NPL ratio was 1.35%, down 0.01 percentage points from the beginning of the year. Allowance to NPLs increased by 4.46 percentage points compared with the beginning of the year, showing enhanced resilience to risks.

Enterprise risk management was further enhanced. ICBC has improved the Group’s internal risk control system and mechanism, and continued to improve the enterprise risk management system. The Bank has strengthened information technology and cyber-security, as well as the lifecycle risk control and prevention of products, and strengthen risk management in emerging areas and investment and financing cooperation institutions. Ongoing efforts were made to screen potential risks, improve risk contingency plans and management measures and properly address global market fluctuations and external shocks.

Risk control became increasingly smarter. ICBC leveraged on its FinTech strengths to accelerate the transformation of smart risk control, promoted the sharing of all risk data, enhanced the crossover risk monitoring efficiency and boosted the capability of early risk identification, warning, detection and handling. 

Reform and Transition Gained Pace, High-quality Development Gained Steam

ICBC has kept to the right path while making innovations, stayed the course of modern financial development, with a focus on changes in customer demand. The Bank has advanced innovations in key fields, including the GBC+ projects and D-ICBC, in a bid to further improve the business ecosystem where new growth drivers are gaining steam.

The foundation for creating an ecosystem-based service system was further fortified. ICBC has made persistent efforts on GBC+ projects, enhancing the synergies between capital chain, customer chain, service chain and value chain. The Bank launched the first financial infrastructure service plan for the banking sector, improved the customer management system for industrial funds and continuously enriched the ecosystem of financial cooperation. The Bank further consolidated the foundation for balancing, maintained a balance between value creation, market position, risk control and capital constraints, promoted the coordination of assets, capital and funds, deposits, loans and revenues, and “Strong, Excellent and Large” objectives and demonstrated soundness in core performance indicators such as profit before provisions and net profit and other core indicators, ensuring that the balance sheet is clean and healthy and the income statement is balanced, coordinated and sustainable.

The diverse structure continued to improve. ICBC continued to adjust the structure to be better and stronger. The mix of “large, medium, small and micro enterprises and personal customers” was built at a faster pace, and the number of corporate customers, individual customers and inclusive finance customers increasing by 788 thousand, 8.93 million, and 463 thousand respectively. The business structure continued to improve, showing a further expansion in the shares of retail loans and inclusive loans in total new lending. The segment mix continued to consolidate. Corporate loans, bond investment, savings deposits, and institutional and interbank deposits achieved solid growth. The balance of RMB deposits reached nearly RMB32.4 trillion, an increase of RMB557 billion. The balance of personal financial assets (AUM) was close to RMB21.8 trillion, continuing to maintain its lead.

Digital drivers gained steam. ICBC continued to promote D-ICBC development, shifting more digital products and services from “available” to “user-friendly”. The Mobile Banking Version 9.0 was released, providing customers with smarter and more intelligent mobile financial services and maintaining a leading edge by customer base and monthly active users (MAUs). The Bank deepened the technological development and empowerment of 100 billion-scale large models, which have been applied in scores of business scenarios in global markets, credit risk control and internet finance, stepping up the fostering of new drivers and new strengths. ICBC continued to improve the intelligent banking ecosystem (ECOS), taking the first spot industry-wide by number of invention patent grants in the first half year. Tackling new challenges in cyber-security in the financial sector in a proactive manner, the Bank’s information systems maintained a high availability rate of over 99.99%.

ICBC effectively served higher-standard opening-up. ICBC has served China’s higher-standard opening-up giving full play to its strengths in global operations. ICBC launched the “Chunrong Action 2024” to support integrated development and domestic and foreign trade, issuing over RMB500 billion of financing to key foreign traders and foreign-funded companies in China in the first half year. The “Chunxu Action” went deeper in providing high-quality cross-border RMB services for global market players. The Bank focused on supporting the efforts to build “strong international financial centers”, supported financial market opening-up and served more than 700 foreign institutional investors in over 60 countries and regions. The payment services for foreign visitors to China were improved, with the “Overseas Visitors Payment Service Center” established to provide professional services including foreign card-based cash withdrawal, currency exchange and advisory service for linking foreign cards to local accounts. ICBC continued to deepen international cooperation, gave full play to such platforms as the BRICS Business Council (BBC), the Belt and Road Bankers Roundtable (BRBR) mechanism and the China-Europe Business Council (CEBC) to help build a more stable international finance order featuring multilateral cooperation.